The data and events calendar starts the week reasonably light but is punctuated by tomorrow’s RBNZ’s policy meeting and Wednesday’s release of US durable goods orders data for May before hitting a crescendo on Friday. The focus will be squarely on day one of the G20 leaders summit in Japan and a possible meeting between the US and Chinese leaders. Moreover, there will be two key inflation data releases for markets to digest – Eurozone CPI-inflation (June) and the US PCE inflation index (May).
Monday 24th June
New Zealand: Trade balance (May). This data series is heavily seasonal but the annual trade deficit has been ranging between NZD 5.5bn and NZD 6.5bn in the past six months.
Tuesday 25th June
Australia: Reserve Bank of Australia Assistant Governor Bullock to speak. Governor Lowe spoke earlier today, arguing that the risks to global growth were tilted to the downside and that t was legitimate to ask how effective monetary easing would be globally if central banks are cutting rates in unison. Markets are pricing an 88% probability of a 25bp rate cut at next week’s RBA policy meeting and 56bp of cuts between now and year-end.
United States: FOMC members Williams, Bostic and Bullard to speak. While the Federal Reserve has clearly moved in a dovish direction in recent months, including at last week’s policy meeting, FOMC members are seemingly still divided as to when and how aggressively the Fed should cut its policy rate.
New Zealand: Reserve Bank of New Zealand policy meeting, statement and press conference. The RBNZ has arguably been one of most dovish central banks, cutting its policy rate 25bp back on 8th May. It has since taken a somewhat more neutral view and analysts expect it to keep its policy rate unchanged at 1.50% this week but to signal scope for further rate cuts this year.
Wednesday 26th June
United Kingdom: Bank of England Governor Carney to speak. All nine MPC members last week voted unanimously to keep the Bank of England’s policy rate unchanged at 0.75%, despite some members (Haldane, Saunders) in the run-up to the meeting making the case for a rate hike.
United States: Durable goods orders (May).
United States: FOMC Daly to speak.
Thursday 27th June
United States: GDP (Q1, third estimate). US GDP growth accelerated to 3.1% qoq seasonally-adjusted annualised in Q1, according to the second estimate, from 2.2% in Q4 2018. Analysts expect the third and final estimate to be unchanged at 3.1%.
Friday 28th June
Global: Day one of two of the G20 Summit in Osaka, Japan. The focus will be on a bilateral meeting between US President Trump and his Chinese counterpart Xi Jinping, with price action in US equities and the Dollars suggesting that markets are hopeful that the US and China can reach some kind of agreement on trade or at least delay the imposition of any further import tariffs.
Australia: Private sector credit (May).
Switzerland: KOF leading indicator (June).
United Kingdom: GDP (Q1, second estimate). UK GDP growth accelerated to 0.5% qoq in Q1, according to the preliminary estimate, but markets are focusing on the likely slowdown in UK economic growth in Q2. The Bank of England recently forecast that the UK’s real GDP was unchanged from Q1 (i.e. 0% qoq).
Eurozone: CPI-inflation (June, preliminary data). Eurozone inflation has remained very weak, with headline and core falling to respectively 1.2% yoy and 0.8% yoy in May. Along with tepid Eurozone GDP growth this recently prompted the ECB to delay its expected timing for its first rate hike to H1 2020 and President Draghi to announce a possible easing of monetary policy, including a resumption of the ECB’s quantitative easing program.
United States: Personal Consumption Price Index (May). This measure of US inflation, favoured by the Federal Reserve, has oscillated around 1.4% yoy since February while core PCE inflation has been broadly unchanged at 1.6% yoy. The consensus forecast is that the stickiness of US PCE inflation at low levels has been a driver of the Fed’s dovishness and the likelihood that it will cut rates in coming months.
