Will this week’s consumer price data support the “sticky inflation” narrative and encourage other major central banks to go back to raising interest rates?
This week, Canada, Australia, and the U.S. will print their latest inflation-related numbers.
Before all that, ICYMI, I’ve written a quick recap of the market themes that pushed currency pairs around last week. Check it!
And now for the closely-watched economic indicators on the calendar this week:
Canada’s CPI report
Headline consumer prices in Canada rose by 0.7% in April, higher than the 0.5% uptick seen in March. Annualized inflation also surprised to the upside, printing at 4.4% when many had priced in a slowdown from 4.3% to 4.1%.
On June 27 at 12:30 pm GMT, markets see another 0.5% headline price increase in May, which maaaaay be enough to slow down annual inflation from 4.4% to 3.6%.
Despite the lower estimates, some speculators are saying that not even low CPI readings would prevent another 25bps rate hike from Bank of Canada in July. Do you agree?
Central bankers’ panel discussion
In case you didn’t know, the European Central Bank (ECB) will host a central banking forum this week. What you need to watch for is the panel discussion happening on June 29 at 1:30 pm GMT.
Aside from a speech by ECB President Lagarde herself, we’ll also hear from central bank bigwigs like Fed’s Powell, BOJ’s Ueda, and BOE’s Bailey.
Keep an eye out for general themes and tidbits that might hint at the major central banks’ policy direction!
U.S. core PCE price index
On Friday at 12:30 pm GMT, Uncle Sam will drop the Fed’s preferred inflation measure.
I’m talking about the core Personal Consumption Expenditures (PCE) price index! Word around is that the numbers would show prices easing in May.
Monthly core PCE could dip from 0.4% to 0.3%, which could drag the annual rate from 4.7% to 4.3%.
Of course, any hint we get from the report could be overshadowed by headlines from Powell and his central banker friends.
