The G7 leaders summit will take place on 7-8 June and major economies are due this week be publishing May data for service sector and composite Purchasing Managers Indices (PMIs), providing further colour for country-specific and global GDP growth in Q2.
The UK calendar is quite heavy, with May services PMI and housing price data, as well as April industrial output. Also a number of Bank of England MPC members, including the typically hawkish McCafferty, are due to speak.
European politics grabbed the headlines last week but markets may this week refocus their attention on Eurozone macro data, including April retail sale and key German data, as well as a scheduled speech by ECB president Draghi.
In the US the Federal Reserve is due to hold its next policy meeting on 13th June and therefore FOMC members are now in blackout and will not be speaking publicly for the next 10 days.
Monday 4th June
Public holiday: New Zealand
United Kingdom: MPC Member Tenreyro speaks
Tuesday 5th June
United Kingdom: May BRC retail sales monitor. A first glimpse of how retail sales performed in May although note the recent disconnect between the very weak British Retail Consortium and more volatile official measures of retail sales.
Australia: Reserve Bank of Australia (RBA) policy meeting. No change expected to the 1.50% policy rate until next year but RBA may point to recent improvement in Australian macro data
United Kingdom: May services Purchasing Managers Index (PMI). This gage of economic activity improved slightly in the arguably less important manufacturing sector to 54.4 from 53.9 in April.
Eurozone: April retail sales. This is historically volatile series but retail sales have contracted about 1% since November 2017 in line with the broader economic growth slowdown in the Eurozone.
United Kingdom: MPC Member Cunliffe speaks.
Eurozone: ECB President Draghi speaks. Draghi has said little in recent weeks but may well comment on recent political developments in Italy and Spain and subsequent Euro volatility and possible implications for ECB monetary policy, including its Quantitative Easing program.
Wednesday 6th June
Australia: Q1 GDP. These data are now relatively “old” but larger company profits in Q1 and a bigger-than-expected rise in inventories support analysts’ forecast that GDP growth doubled to 0.8% quarter-on-quarter from Q4 2017.
Switzerland: May CPI-inflation. While Swiss economic growth has seemingly picked up this year consumer price inflation has remained subdued and arguably stopped the central bank from turning more hawkish and acted as a headwind to CHF appreciation. Analysts expect that CPI-inflation only rose marginally to 0.9% yoy from 0.8% yoy in April.
United Kingdom: MPC Members Tenreyro and McCafferty speak. McCafferty voted for a 25bp policy rate hike at the May policy meeting and may well reiterate his preference for higher UK interest rates.
United States: April trade balance. The US trade deficit on goods and services fell back below $50bn in March but this has done little to assuage President Trump’s desire to introduce protectionist tariffs against the United States’ main trading partners.
Thursday 7th June
United Kingdom: May Halifax Housing Price Index and RICS house price balance. The UK property market has cooled with the Halifax housing price index falling 3.1% mom in April – the largest monthly fall since September 2010 – and the RICS price balance of -8% in April pointing to downward price pressure.
United Kingdom: MPC Member Ramsden speaks.
Friday 8th June
Germany: April exports and industrial production. While output rebounded 3.2% yoy in March, economic growth in the European Union’s largest economy has slowed sharply in recent months with German exports down 1.8% yoy.
United Kingdom: April industrial production. Industrial output growth has recovered briskly since December and hit 2.9% yoy in March but with industry accounting for only 20% of the UK economy markets are more likely to remain focussed on the far more important services sector.
Global: G7 leaders summit in Canada (8-9th June). G7 leaders likely to reiterate their criticism of United States’ recent decision to introduce tariffs on imports of steel and aluminium from European Union, Canada and Mexico. Newly appointed Italian Prime Minister Giuseppe Conte’s first G7 leaders summit.
