Economic Outlook 11 – 15 June 18

Money Economic Calendar

G-7 Summit

This past weekend we there was the G-7 Summit held in La Malbaie, Quebec, Canada. Trump again was quick to shout his mouth about the present “unfair” trading system. The potentially ill-fated “communique” spoke to deep divisions, though Trump was fairly upbeat on shared G-7 “values and beliefs” in his early exit speech while sticking to his guns on trade reciprocity. On Tuesday Trump and Kim Jong Un will meet in Singapore for a one on one summit which will almost 100% have an impact on the financial markets. We then turn out attention to the FOMC, ECB, and BoJ results on Wednesday, Thursday, and Friday, respectively.

United States:  The U.S. economic calendar this week is a busy one, with the FOMC meeting and readings on inflation. Economic data will include CPI, PPI, and Retail Sales. Gains in oil prices should help Import prices to rise so we shall be looking for gains there.

UK: The calendar this week is jam-packed, April industrial production and trade data (Monday), monthly labor data covering the April-May period (Tuesday), May inflation numbers (Wednesday), and May retail sales (Thursday).

Incoming data and BoE-speak have kept alive prospects for a 25 bp hike in the repo rate as soon as the August MPC meeting when the central bank next publishes its quarterly Inflation Report.

FOMC: is one among several key events ahead that could rattle the markets, alongside ongoing trade uncertainties. The Fed is expected to maintain the median dot projection of three rate hikes this year, though there’s speculation of a bump up to four.

Canada: The Loonie has May existing home sales (expected Friday) and the April manufacturing survey (Friday) are the lone highlights. There is nothing scheduled from the Bank of Canada this week however, there is scope from the comments from policymakers on the sidelines of the G-7.

Europe: The main focus this week will be the ECB meeting on Thursday where Draghi will be speaking about the remaining 30 Billion EUR of asset purchases.

The ECB meeting will overshadow the data calendar, which will focus on final inflation readings for May and the June ZEW investor confidence reading out of Germany. Against that background, the German ZEW Economic Sentiment (Tuesday). Real economic data also continues to disappoint and after weak national Eurozone production (Wednesday) and trade numbers (Friday) are unlikely to show anything but ongoing weakness at the start of the second quarter.

Japan: The June MoF business outlook survey (Tuesday) is seen at 4.0 from 3.3 previously. May PPI (Tuesday),  The April tertiary industry index (Tuesday) is penciled in at up 0.5% from -0.3% in March. Revised April industrial production is due Thursday. The BoJ’s two-day meeting, beginning Thursday, is expected to result in no change to the Bank’s huge stimulus program, as economic data since the meeting in April has been mostly disappointing. A news report circulated last week that the Bank may consider reducing the forecasts for inflation in fiscal 2018 and further out, as slow CPI growth in April was an unexpected development for the BoJ.

China: May fixed investment (Thursday) is forecast at up 7.1% y.y from 7.0%.

Australia: The employment report (Thursday) is the focus, with the data calendar otherwise fairly thin. There is the Housing finance (Tuesday).  The Reserve Bank of Australia’s Assistant Governor Ellis delivers a speech (Friday), while Governor Lowe speaks on “Productivity, Wages, and Prosperity” (Wednesday). Markets are closed on Monday.

Economic Calendar

Market Watch

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