In the week of 10.06.2024 – 16.06.2024, the Fed meeting will be in the spotlight. The interest rate decision will be released on Wednesday, June 12. It is widely expected that the rate will remain unchanged and the Fed officials will emphasize that the fight against high inflation will continue. Many economists believe that the Fed will not cut rates this year.
Nonetheless, the intrigue of the Fed's next move remains and continues to draw the attention of financial market participants.
In addition, during the week of 10.06.2024 - 16.06.2024, markets will pay attention to the publication of important macroeconomic statistics from Japan, the UK, China, Germany, the US, as well as the Bank of Japan's meeting results.
Note: During the coming week, new events may be added to the calendar and / or some scheduled events may be cancelled. GMT time
Sunday, June 9
23:50 JPY Japan GDP for Q1 2024 (Final Estimate)
GDP is considered an indicator of the overall health of a country's economy, evaluating its growth or decline rates. The Gross Domestic Product report, published by the Cabinet Office of Japan, expresses in monetary terms the total value of all final goods and services produced by Japan during a given period. An increasing trend in GDP is considered a positive factor for the Japanese currency, while a low reading is seen as negative (or bearish).
In the previous 4th quarter, the country's GDP was 0% (0% y/y) after -0.8% (-3.2% y/y) in the 3rd quarter, +1.0% (+4.2% y/y) in the 2nd quarter, and +1.0% (+4.0% y/y) in the 1st quarter.
The data indicate the uneven recovery of the Japanese economy after its decline due to the pandemic in 2020.
The forecast (final estimate) suggests that Japan's GDP will shrink again by -0.5% (-2.0% y/y) in the 1st quarter of 2024, which is a negative factor for the yen.
Better-than-forecast data will support the yen and Japanese equity indices, while worse-than-forecast data will put pressure on them.
Monday, June 10
No significant macroeconomic statistics are scheduled for release.
Tuesday, June 11
06:00 GBP UK Average Weekly Earnings (3 Months Average). Unemployment Rate
The UK Office for National Statistics (ONS) releases a monthly report on average earnings, covering the past three months, including bonuses and excluding bonuses.
This report is a key short-term indicator of wage changes for employees in the UK. Rising earnings are positive for the GBP, while a low value is negative. The forecast for June suggests that average wages, including bonuses, increased again over the last calculated three months (February-April), following increases of +5.7%, +5.6%, +5.6%, +5.8%, +6.5%, +7.2%, +7.9%, +8.1%, +8.5%, +8.2%, +6.9%, +6.5%, +5.8%, +5.9%, +6.0%, +6.5%, +6.1%, +5.5%, +5.2%, +6.4%, +6.8%, +7.0%, +5.6%, +4.8%, +4.3%, +4.2% in previous periods; excluding bonuses also increased following rises of +6.0%, +6.0%, +6.1%, +6.2%, +6.6%, +7.3%, +7.7%, +7.8%, +7.8%, +7.8%, +7.3%, +7.2%, +6.7%, +6.6%, +6.6%, +6.7%, +6.5%, +6.1%, +5.8%, +5.5%, +5.2%, +4.7%, +4.4%, +4.2%, +4.2%, +4.1%, +3.8%, +3.7%, +3.8% in previous periods. Thus, the data indicate continued wage growth, which is positive for the pound. If the data is better than the forecast and/or previous values, the pound is likely to strengthen in the currency market. Data worse than the forecast/previous values will negatively impact the pound.
At the same time, UK unemployment data will be published. It is expected that over the three months (February-April), unemployment remained at 4.3% (against 4.3%, 4.2%, 3.8%, 4.2%, 4.2%, 4.2%, 4.2%, 4.3%, 4.2%, 4.0%, 3.8%, 3.9%, 3.8%, 3.7%, 3.7%, 3.7%, 3.7%, 3.6%, 3.5%, 3.6%, 3.8%, 3.8%, 3.8%, 3.7%, 3.8%, 3.9%, 4.1%, 4.2%, 4.3%, 4.5%, 4.6%, 4.7%, 4.8%, 4.7%, 4.8%, 4.9%, 5.0%, 5.1%, 5.0% in previous periods).
Since 2012, the unemployment rate in the UK has been steadily decreasing (from 8.0% in September 2012). This is a positive factor for the pound, while rising unemployment is a negative factor.
If UK labor market data is worse than forecast and/or previous values, the pound will come under pressure.
In any case, during the publication of UK labor market data, an increase in volatility in the pound's quotes and on the London Stock Exchange is expected.
Wednesday, June 12
01:30 CNY Consumer Price Index (CPI)
The National Bureau of Statistics of China will present monthly data reflecting consumer price dynamics in China. Rising consumer prices may trigger accelerated inflation, potentially prompting the People's Bank of China to tighten fiscal policy. Increased consumer inflation can cause the yuan to appreciate, while low results will pressure the yuan.
China's economy is the second largest in the world after the US. Therefore, the publication of significant macroeconomic indicators from China has a noticeable impact on global financial markets, particularly on the yuan, other Asian currencies, the dollar, commodity currencies, as well as Chinese and Asian stock indices. China is the largest buyer of commodities and a supplier of a wide range of finished products to the global market.
In April 2024, the consumer inflation index was +0.1% (+0.3% year-on-year), +0.1% (-2.7% year-on-year) in December 2023, -0.5% (-0.5% year-on-year) in November, +0.2% (0% year-on-year) in September, +0.3% (+0.1% year-on-year) in July, -0.2% (0% year-on-year) in June, -0.2% (+0.2% year-on-year) in May.
An increase in the consumer inflation index will positively affect the yuan and commodity currencies. However, data worse than the forecast and a relative decline in the CPI could negatively impact them. This is especially true for the Australian dollar, as China is Australia's largest trading partner.
06:00 EUR Harmonized Index of Consumer Prices (HICP) in Germany (final estimate)
The Harmonized Index of Consumer Prices (HICP) is published by the EU Statistics Office and calculated based on a statistical methodology agreed upon by all EU countries. It is an indicator for assessing inflation and is used by the ECB Governing Council to assess price stability. A positive result strengthens the EUR, while a negative one weakens it.
Previous values: +2.4%, +2.3%, +2.7%, +3.1% in January 2024, +3.8% in December, +2.3% in November, +3.0% in October, +4.3% in September, +6.4% in August, +6.5% in July, +6.8% in June, +6.3% in May, +7.6% in April, +7.8% in March, +9.3% in February, +9.2% in January, +9.6% in December, +11.3% in November, +11.6% in October, +10.9% in September, +8.8% in August, +8.5% in July, +8.2% in June, +8.7% in May, +7.8% in April, +7.6% in March, +5.5% in February, +5.1% in January 2022 (year-on-year).
The data indicate a continuing slowdown in inflation in Germany, albeit at a slower pace than expected, putting pressure on the ECB to ease its monetary policy. Data weaker than the previous value is likely to negatively affect the euro. Conversely, a resurgence in inflation could strengthen the euro. Rising figures are positive for the euro.
If the data for May exceeds previous values, the euro may strengthen in the short term.
Forecast for May (final estimate): +0.2% (+2.8% year-on-year) with the same preliminary estimate.
12:30 USD Consumer Price Indexes
The Consumer Price Index (CPI) measures the change in prices of a selected basket of goods and services over a period and is a key indicator for assessing inflation and changes in consumer preferences. Food and energy are excluded from the Core CPI for a more accurate assessment.
A high result strengthens the US dollar, increasing the likelihood of a Fed rate hike, while a low result weakens it.
Previous values (year-on-year):
- CPI: +3.4%, +3.5%, +3.2%, +3.1%, +3.4%, +3.1%, +3.2%, +3.7%, +3.7%, +3.2%, +3.0%, +4.0%, +4.9%, +5.0%, +6.0%, +6.4% (in January 2023)
- Core CPI: +3.6%, +3.8%, +3.8%, +3.9%, +3.9%, +4.0%, +4.0%, +4.1%, +4.3%, +4.7%, +4.8%, +5.3%, +5.5%, +5.6%, +5.5%, +5.6% (in January 2023)
The presented data indicates a continued slowdown in consumer inflation, much lower than the 2022 figures when annual inflation in the US peaked at a 40-year high of 9.1% in June. On the other hand, US inflation remains significantly above the Fed's 2% target, pushing Fed officials to maintain high-interest rates.
If the data confirms or is weaker than the forecast, the US dollar is likely to respond with a short-term decline. Stronger-than-forecast data will strengthen the dollar, increasing the likelihood of the Fed maintaining high-interest rates for longer.
18:00 USD Fed Interest Rate Decision. Fed Monetary Policy Commentary. Summary of Economic Projections by the FOMC
At several meetings in the first half of 2024, Fed officials kept monetary policy parameters unchanged, and the key interest rate remained at 5.50%.
Market participants now expect the US central bank to begin a cycle of monetary easing. The main forecast suggests that the Fed will start lowering interest rates in the second half of 2024.
Nevertheless, there remains a possibility of another interest rate hike this year if inflation starts to rise again, as repeatedly warned by Fed Chair Jerome Powell.
For now, it is widely expected that the rate will remain at the current level of 5.50%.
During the rate decision announcement, volatility may sharply increase across the financial market, primarily in the US stock market and in dollar quotes, especially if the rate decision differs from the forecast or if unexpected statements come from the Fed leadership.
Powell's comments could impact both short-term and long-term trading of the USD. A more hawkish stance on the Fed's monetary policy is seen as positive and strengthens the US dollar, while a more cautious approach is viewed as negative for the USD. Investors are eager to hear Powell's views on the Fed's plans for this year and the next.
The Fed's report with forecasts for the interest rate, inflation, and economic growth for the next two years will also be of interest, and equally important will be the individual opinions of the FOMC members on interest rates.
18:30 USD FOMC (Federal Open Market Committee) Press Conference
The press conference of the Federal Open Market Committee of the US Federal Reserve lasts about an hour. In the first part, the resolution is read out, followed by a Q&A session, which can increase market volatility. Any unexpected statements by Powell on the Fed's monetary policy will cause increased volatility in dollar quotes and the US stock market.
19:30 CAD Bank of Canada Governor Tiff Macklem Speaks
The Canadian economy, like the global economy, has been slowing down since 2020 (initially due to the coronavirus pandemic). Previously, Tiff Macklem stated that the country's economy is quite resilient. However, the situation has rapidly changed for the worse. It will now be interesting to hear Macklem's views on the resilience of the Canadian economy and the central bank's monetary policy in the face of persistently high inflation.
If Tiff Macklem addresses the topic of the Bank of Canada's monetary policy, volatility in the Canadian dollar quotes will sharply increase. A hawkish tone in his speech will contribute to the strengthening of the Canadian dollar. Conversely, a dovish tone and a tendency towards a soft monetary policy will negatively affect CAD quotes.
He will likely also explain the Bank of Canada's recent decision on the interest rate and may provide some guidance for investors ahead of the central bank's next meeting, which is likely to take place next month.
Thurdsay, June 13
01:30 AUD Unemployment and Employment Rates.
The employment level reflects the monthly change in the number of employed citizens in Australia. An increase in this indicator has a positive impact on consumer spending, which stimulates economic growth. A high value of the indicator is a positive factor for the AUD, while a low value is negative. Previous values of the indicator are: +38,500 in April, -6,600 in March, +500 in February, -65,100 in January 2024, +61,500 in December 2023, +55,000 in October, +6,700 in September, +64,900 in August, -14,600 in July, +32,600 in June, +75,900 in May, -4,300 in April, +53,000 in March, +64,600 in February, -11,500 in January, +14,600 in December, +64,000 in November, +32,200 in October, +900 in September, +33,500 in August, -40,900 in July, +88,400 in June, +60,600 in May, +4,000 in April, +17,900 in March, +77,400 in February, +12,900 in January 2022.
At the same time, the Australian Bureau of Statistics will publish a report on the unemployment rate, an indicator that assesses the ratio of the unemployed population to the total number of working-age citizens. An increase in this indicator indicates weakness in the labor market, which leads to a weakening of the national economy. A decrease in the indicator is a positive factor for the AUD.
Forecast: Unemployment in Australia remained at minimal levels in May at 4.1% (compared to 3.8% in April, 3.7% in March and February, 4.1% in January, 3.9% in December and November, 3.8% in October, 3.6% in September, 3.7% in August and July, 3.5% in June, 3.6% in May, 3.7% in April, 3.5% in March and February, 3.7% in January, 3.5% in December, 3.4% in November and October, 3.5% in September and August, 3.4% in July, 3.5% in June, 3.9% in May and April, 4.0% in March and February, 4.2% in January), and the employment level increased.
RBA officials have repeatedly stated that, in addition to the situation in international trade, the Australian economy and the central bank's monetary policy plans are influenced by household debt and spending levels, wage growth, and the state of the country's labor market. If the indicators are worse than the forecast, the Australian dollar may significantly decline in the short term. Data better than the forecast will strengthen the AUD in the short term.
12:30 USD Producer Price Index (PPI)
The Producer Price Index measures the average change in wholesale prices determined by producers at all stages of production. It is one of the leading indicators of inflation in the United States, assessing the average change in wholesale prices by producers.
Since rising production costs increase wholesale prices, this ultimately raises consumer inflation. Inflation growth (under normal economic conditions) usually exerts upward pressure on the national currency's exchange rates, as it implies a tighter monetary policy by the central bank.
Previous values: +0.5% (+2.2% year-over-year) in April, +0.2% (+1.6% year-over-year) in March, +0.6% (+1.6% year-over-year) in February, +0.3% (+0.9% year-over-year) in January 2024, 0% (+0.9% year-over-year) in December 2023, -0.5% (+1.3% year-over-year), +0.5% (+2.2% year-over-year), +0.7% (+1.6% year-over-year), +0.3% (+0.8% year-over-year), +0.1% (+0.2% year-over-year), -0.3% (+0.9% year-over-year), +0.2% (+2.3% year-over-year), -0.5% (+2.7% year-over-year), -0.1% (+4.9% year-over-year), +0.7% (+5.7% year-over-year) in January 2023.
If the data is better than forecasted (above the forecast values), the dollar is likely to strengthen. Conversely, data below the forecast and previous values will put pressure on the Fed to ease its monetary policy, negatively impacting the dollar.
Friday, June 14
After 01:00 (exact time not specified): JPY Bank of Japan Interest Rate Decision. Bank of Japan Press Conference and Monetary Policy Statement
The Bank of Japan will make a decision on the interest rate. Currently, the main rate in Japan is 0%. It is likely to remain at this level. If the rate is reduced and returns to negative territory, such a decision will cause a sharp decline in the yen in the forex market and a rise in the Japanese stock market. In any case, during this period, a surge in volatility is expected in yen quotes and across the Asian financial market.
Since February 2016, the Bank of Japan has kept the deposit rate at -0.1% and the target yield on 10-year bonds around 0%.
However, at the March 19 meeting, the Bank of Japan's board members decided to raise the interest rate by 10 basis points, from -0.1% to 0%, for the first time since 2007, ending the period of negative interest rates that began in 2016. At the same time, the target for long-term JGB (YCC) was abolished, although the Bank of Japan still intends to buy the same amount of JGB per month as before, only without a clear target. On the other hand, the bank is stopping purchases of ETFs and REITs, and purchases of commercial paper and corporate bonds will gradually decrease and cease completely within 12 months.
The yen reacted negatively to this decision. Economists believe that the symbolic rejection of negative interest rate policy is unlikely to give it a significant boost. Only if the Bank of Japan hints at further rate hikes, indicating a real rate hike cycle, will the yen, in their opinion, receive substantial support.
During the press conference, Bank of Japan Governor Kazuo Ueda will comment on the bank's monetary policy. The Bank of Japan continues to adhere to an ultra-loose monetary policy. Former BoJ Governor Haruhiko Kuroda said that for Japan, it was appropriate to patiently continue the current accommodative monetary policy. Markets usually react noticeably to the speeches of the Bank of Japan's head. Surely, he will again touch on the topic of monetary policy during his speech, which will cause a rise in volatility not only in yen trading but also across the entire Asian and global financial markets.
After 05:00 (exact time not specified) JPY Bank of Japan Press Conference
During the press conference, Bank of Japan Governor Kazuo Ueda, who replaced Haruhiko Kuroda in April 2023, will comment on the bank's monetary policy. Despite the measures previously taken by the bank to stimulate the Japanese economy, inflation remains low, production and consumption are falling, which negatively affects export-oriented Japanese manufacturers. Markets usually react noticeably to the speeches of the Bank of Japan's head. If he touches on the topic of monetary policy during his speech, volatility will increase not only in yen trading but also across the entire Asian and global financial markets.
14:00 USD University of Michigan Consumer Sentiment Index (Preliminary Release)
This indicator reflects US consumers' confidence in the country's economic development. A high level indicates economic growth, while a low level points to stagnation. Previous indicator values: 69.1 in May, 77.2 in April, 79.4 in March, 76.9 in February, 79.0 in January 2024, 69.7 in December 2023, 61.3 in November, 63.8 in October, 68.1 in September, 69.5 in August, 71.6 in July, 64.4 in June, 59.2 in May, 63.5 in April, 62.0 in March, 67.0 in February, 64.9 in January 2023, 59.7 in December, 56.8 in November, 59.9 in October, 58.6 in September, 58.2 in August, 51.5 in July, 50.0 in June, 58.4 in May, 65.2 in April, 59.4 in March, 62.8 in February, 67.2 in January 2022. An increase in the indicator will strengthen the USD, while a decrease will weaken the dollar. The data indicates uneven recovery of this indicator, which is negative for the USD. Data worse than previous values may negatively affect the US dollar in the short term.
Price chart of USDX in real time mode
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