Welcome to our review of the week's economic events, as we find ourselves amid one of the most significant weeks in the middle of 2023. This week brings a series of crucial monetary decisions and key rate hikes, making it an important period to closely observe and understand the potential impacts on the global economy.
United Kingdom Claimant Count Change
📅 Tuesday, June 13th at 9:00 (GMT+3).
📌 The UK Claimant Count Change is a measure of the monthly change in the number of people in the UK claiming unemployment-related benefits. It is a key barometer of the country's job market health and can significantly impact its economic indicators.
📊 The Bank of England remains confident that inflation will return to target over the forecast horizon and yet the new staff projections highlighted how challenging it will be. Inflation and growth were both revised significantly higher for this year and labour market figures could help explain why that is.
Assets potentially to be affected: $GBP and $UK Stocks 🇬🇧
United States Consumer Price Index (CPI) m/m
📅 Tuesday, June 13th at 15:30 (GMT+3).
📌 The US Consumer Price Index (CPI) is a vital economic indicator that measures the monthly change in the average prices of a basket of consumer goods and services.
📊 Headline inflation is expected to decrease to 4.2% year-on-year from April’s pace of 4.9%, while the core inflation is projected to increase marginally to 5.6% from April’s 5.5%. The reports are released at the start of the Federal Reserve’s meeting; higher-than-expected numbers may force the Fed’s hand to forgo its plans to pause the interest rate hikes.
Assets potentially to be affected: $USD and $US Stocks 🇺🇸
United Kingdom Gross Domestic Product (GDP) m/m
📅 Wednesday, June 14th at 09:00 (GMT+3).
📌 United Kingdom Gross Domestic Product (GDP) q/q refers to a measurement of the total value of goods and services produced within the UK economy, and is a key indicator of the country's economic performance and growth rate.
📊 It is anticipated that the GDP data will indicate a slight growth in the UK economy once again, which is likely the most optimistic outcome we can expect in the upcoming quarters. Positive data from the UK hints at a potential interest rate increase by the Bank of England, fostering a sense of hope among buyers of the British pound against the US dollar.
Assets potentially to be affected: $GBP and $UK Stocks 🇬🇧
Fed Interest Rate Decision
📅 Wednesday, June 14th at 21:00 (GMT+3).
📌 The Federal Reserve (Fed) Interest Rate Decision announces the US central bank's monetary policy stance regarding the federal funds rate.
📊 While it is widely anticipated that the policymakers will pause their tightening measures at this time, a larger-than-expected increase in last month’s inflation index may lead to another 25 bps hike, given conflicting economic data. If the Fed decides to pause, investors’ attention will turn to the tone of the FOMC statement, to determine whether the tone is hawkish or dovish regarding future developments of inflation.
Assets potentially to be affected: $USD and $US Stocks 🇺🇸
ECB Interest Rate Decision
📅 Thursday, June 15th at 12:15 (GMT+3).
📌 ECB Interest Rate Decision is announced after the European Central Bank meetings, on which the euro zone's monetary policy is discussed. The interest rate decisions depend on the inflationary outlook and economic growth.
📊 The ECB may raise its deposit rate by 25 basis points this week, even though the Eurozone economy is almost certainly in recession as it struggles with inflation five times its target. Traders watch interest rate changes closely, as short-term interest rates are the primary factor in currency valuation. A higher-than-expected rate is positive/bullish for the $EUR, while a lower-than-expected rate is bearish for the $EUR.
Assets potentially to be affected: $EUR and $EU Stocks 🇪🇺
BoJ Interest Rate Decision
📅 Friday, June 16th at 5:30 (GMT+3).
📌 The Bank of Japan's interest rate decision refers to the central bank's determination of the target level for short-term interest rates in Japan.
📊 The current interest rate in Japan is negative at -0.1%. According to forecasts, it may stay at the current level or rise to 0%. Either way, this will have an effect on the currency pairs with the Japanese Yen, including the $JPY/USD.
Assets potentially to be affected: $JPY 🇯🇵
That's it for this week! 👋
