We’ve got another round of central bank decisions lined up, plus a fresh batch of PMI readings before the end of the week.
What are traders expecting for the BOE and SNB monetary policy statements?
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:
U.K. CPI report
Before BOE Governor Bailey and his fellow policymakers take the stage, the U.K. economy will be printing its May CPI figures on Wednesday, June 21 6:00 am GMT.
Number crunchers are projecting another dip in headline inflation from 8.7% year-over-year to 8.4% for the month. The core version of the report could also see a decline from 6.8% year-over-year to 5.8% in May, easing the pressure on the U.K. central bank to keep hiking rates.
However, as detailed in this Event Guide for the May U.K. CPI Report, leading indicators such as PMI releases and wage growth data point to slightly stronger price pressures.
Canada’s retail sales
Another event worth watching early in the week is Canada’s retail sales report due on Wednesday, June 21 12:30 pm GMT, as a rebound in consumer spending is eyed.
Analysts are expecting to see 0.3% upticks in headline and core retail sales, following the earlier 1.4% and 0.3% declines respectively.
Stronger than expected results could up the odds of another interest rate hike from the BOC in their next decision, especially since the central bank kept the door open for more tightening moves if needed.
SNB monetary policy decision
On Thursday, June 22 7:30 am GMT, the Swiss National Bank will announce its interest rate statement.
Another rate hike is eyed, as the central bank is expected to increase borrowing costs from 1.50% to 1.75%. This would be at a slower pace compared to its earlier tightening moves of 0.50% in December and March.
Recent reports suggest that their policy decisions have been enough to bring inflation back down to their target range, so there might be enough reason to pause as well.
BOE monetary policy statement
Later in the day, the BOE will be taking the spotlight to announce its policy decision on June 22 11:00 am GMT.
Another 0.25% interest rate hike is eyed, but the decision isn’t likely to be unanimous since a couple of dovish members probably voted to stand pat again. More MPC members calling for a pause this time could bring some downside for the pound, as this would confirm that the BOE is approaching the end of its tightening cycle.
May PMI readings
It’s the third week of the month, which means another batch of flash PMI reports!
As always, the French economy will get the ball rolling by printing its manufacturing and services PMIs by June 23 7:15 am GMT. Slight dips in the industry readings are eyed, with the former slated to fall from 45.7 to 45.2 and the latter to drop from 52.5 to 52.1.
Mixed results are expected from Germany, as the flash manufacturing PMI could climb from 43.2 to 43.6 while the services PMI probably dipped from 57.2 to 53.6.
Over in the United Kingdom, the flash manufacturing PMI probably fell from 47.1 to 46.8 while the services PMI might have declined from 55.1 to 54.5.
Lastly in the U.S. mixed readings are expected as well, with the manufacturing PMI likely improving slightly from 48.4 to 48.5 and the services PMI probably falling from 54.9 to 54.0.
