Macroeconomic/ geopolitical developments
- The Fed skipped a rate hike in June and announced a “hawkish hold”, but the implication from the dot plot chart is that more hikes are on the way in the coming months.
- As expected, the ECB hiked 0.25%, and despite recently lower-than-expected inflation, the ECB forecasts indicated inflation would remain higher for longer, with further hikes likely on the way.
- Inflation has been falling in China since September. This was coincident with the turn lower in core inflation of the US.
- Eurozone inflation has dropped for two successive months, for the first time since mid-2021.
- Disinflation is finally coming through, as a result of the aggressive interest rate tightening from 2022.
Global financial market developments
- The major US stock averages were significantly higher last week with the S&P 500 building on the prior week’s move into “bull market” territory, up over 20% from the October 2022 low.
- European indices were also notable higher through mid-June, with the DAX hitting a new record high.
- The Japanese benchmark, the Nikkei 225 hit another new multi-decade high to levels not seen since the 1990s.
- US and European Bond were in consolidation pre- and post-Fed and ECB decisions last week, but with European Bonds probing to higher yields.
- The US Dollar Index sold off from a multi-week high at the end of May and is now eyeing the 2023 low.
- Gold dipped and rebounded still within a sideways range, but still looking to build a base.
- Oil stayed in a range.
Key this week
- Geopolitical: Monday 19th June is the US public holiday for Juneteenth, US cash markets are closed with a partial day for US futures.
- Central Bank Watch: A quieter week for central banks, but we do get the Swiss National Bank and Bank of England (BoE) monetary policy decisions, both on Thursday. Jerome Powell makes his Congressional testimonies to the House Financial Services Committee and Senate Banking Committee on Wednesday and Thursday respectively.
- Macroeconomic data: A reactively quiet data week, standouts are the UK CPI on Wednesday and global Flash PMI data from S&P Global on Friday.
|Date||Key Macroeconomic Events|
|19/06/2023||US public holiday (for Juneteenth)|
|20/06/2023||US Building Permits and Housing Starts|
|21/06/2023||UK CPI; Canadian Retail Sales; Jerome Powell Congressional testimony (House Financial Services Committee)|
|22/06/2023||Swiss National Bank monetary policy; Bank of England monetary policy; US Weekly Jobless Claims; Jerome Powell Congressional testimony (Senate Banking Committee)|
|23/09/2023||Flash PMIs for Australia, Eurozone, UK, US|