Upcoming events:
- Monday: China Caixin Services PMI, Eurozone Producer Price Index, Fed SLOOS.
- Tuesday: Reserve Bank of Australia policy decision, unemployment rate in Switzerland, retail sales in the Eurozone.
- Thursday: Average cash earnings in Japan, BoJ sentiment summary, Bank of England policy decision, US unemployment claims.
- Friday: New Zealand Manufacturing PMI, UK GDP, Canada Jobs Report, University of Michigan Consumer Survey,
Tuesday
The Reserve Bank of Australia is expected to keep interest rates unchanged at 4.35%, although the risk of a surprise rate hike cannot be ruled out. The latest inflation report was a cold shower on expectations of interest rate cuts in 2024, with first-quarter CPI numbers beating expectations across the board by a wide margin. The market has pushed back expectations of a first rate cut with the first move now seen sometime in the second quarter of 2025. The central bank has stated several times that the best contribution monetary policy can make to the well-being of the Australian people is to ensure that inflation returns to target. Within a reasonable time frame.
RBA
Thursday
Japan's average cash income on an annual basis is expected to reach 1.5% versus 1.8% previously. The Bank of Japan continues to see the inflation target achieved and declares this Another rate hike still depends on the data. The timing of such a move remains uncertain, with July and October on the table, although the latter is more likely. Governor Ueda has also stated that regardless of what the data will say in the near future, they would like to find a way and timing to reduce the amount of Japanese government bond purchases.
Japan average cash dividends on an annual basis
The Bank of England is expected to keep interest rates unchanged at 5.25%. The latest inflation report showed that headline and core numbers are heading towards more moderation however The measure of services inflation, which worries the central bank more, remained steady at 6%. On the labor market side, recent data showed a rise in unemployment and job losses as wage growth figures rose. In the last meeting, the vote division changed with the more hardline members joining the confirmation camp and Dhingra remaining the usual maverick who votes for the cut. The market expects the first rate cut to take place in September and it is unlikely that we will see the Bank of England make major changes in the next decision.
Bank of England
US unemployment claims remain one of the most important releases to follow each week, as they are a convenient indicator of the state of the labor market. This is because inflation rate falling to the target level set by the Federal Reserve is more likely as the labor market weakens. However, a flexible labor market can make achieving the goal more difficult.
Initial claims continue to hover around the cycle lows, while continuing claims remain steady around the 1800K level. Initial claims this week are expected to be 210K vs. 208K previously, while there is no consensus at the time of writing on continuing claims although the previous release showed a decline to 1774K vs. 1797K expected and 1781K previously.
US unemployment claims
Friday
Canada's labor market report is expected to show 17.5K jobs added in April versus -2.2K in March with the unemployment rate rising to 6.2% versus 6.1% previously. The latest report missed expectations across the board with job losses and a significant jump in the unemployment rate. There has also been an increase in wage growth, which worries the Bank of Canada even more. Although a more flexible labor market would lead to lower future wage gains. The market expects the central bank to cut interest rates for the first time in June, although the likelihood of a move in July is higher.
Unemployment rate in Canada