We have another round of central bank decisions, as well as a fresh set of PMI readings before the end of the week.
What can traders expect from the BoE and SNB monetary policy data?
Before all of that, I wrote ICYMI A quick recap of market topics That pushed the currency pairs last week. check it!
Now for the closely watched economic indicators on the calendar this week:
UK consumer price index report
Before BoE Governor Bailey and his fellow policymakers take the stage, the UK economy will print May CPI numbers on the table. Wednesday 21st June 06:00 AM GMT.
Number analysis firms expect another decline in the headline inflation rate, from 8.7% year-on-year to 8.4% in the month. The core version of the report may also see a drop from 6.8% y/y to 5.8% in May, easing pressure on the BoE to continue raising interest rates.
However, as detailed in this Event guide for the UK CPI report for MayLeading indicators such as PMI releases and wage growth data point to slightly stronger price pressures.
Retail sales in Canada
Another event worth watching early in the week is the Canadian Retail Sales report due out Wednesday, June 21, 12:30 PM GMTwhere a rebound in consumer spending is seen.
Analysts expect to see a 0.3% rise in headline and core retail sales, after previous declines of 1.4% and 0.3%, respectively.
Stronger-than-expected results could increase the odds of another rate hike from the Bank of Canada in their next decision, especially since the central bank kept the door open for more hawkish moves if needed.
The monetary policy decision of the Swiss Central Bank
on Thursday, June 22nd, 7:30 a.m. BSTthe Swiss National Bank will announce its interest rate statement.
The interest rate is expected to be raised again, as the central bank is expected to increase borrowing costs from 1.50% to 1.75%. This will be at a slower pace than its previous tightening moves of 0.50% in December and March.
Recent reports suggest that their policy decisions have been enough to bring inflation back into the target range, so there may be enough reason to pause as well.
Bank of England monetary policy statement
Later in the day, the Bank of England will highlight the announcement of its policy decision on June 22 11:00 a.m. GMT.
A 0.25% rate hike is expected, but the decision is unlikely to be unanimous as a couple of dovish members have likely voted to stand their ground again. More pauses from MPC members this time around could bring some downside to the pound, as this would confirm that the BoE is nearing the end of the 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 with the printing of Manufacturing and Services PMIs by June 23 at 7:15am GMT. There are slight dips in the industry readings, with the former expected to drop from 45.7 to 45.2 and the latter to drop from 52.5 to 52.1.
We expect mixed results from Germany, where the fast manufacturing PMI could rise from 43.2 to 43.6 while the services PMI probably fell from 57.2 to 53.6.
In the UK, the rapid manufacturing PMI may have fallen from 47.1 to 46.8 while the services PMI may have fallen from 55.1 to 54.5.
Finally, mixed readings are also expected in the US, with Manufacturing PMI possibly improving slightly from 48.4 to 48.5 and Services PMI likely declining from 54.9 to 54.0.
