Top Economic Events To Watch | June 17 – June 21 – 2024

The past week saw mixed results for the stock market, with the Nasdaq achieving their fifth consecutive record high, while the S&P 500 and Dow Jones Industrial Average closed slightly lower. The technology sector led the rally, despite the Federal Reserve dialing back their interest-rate reduction expectations. Economic reports, including consumer and producer inflation metrics, continued to decline, suggesting the Fed's upper hand in combating inflation.

However, the less dovish-than-hoped Fed rate outlook weighed on most S&P 500 sectors. Analysts believe that if the disinflation trend continues and the labor market and wage gains cool more than anticipated, policymakers may turn more dovish, potentially bringing forward rate-cut expectations and improving market conditions.

As we move into the new week, let's look at the top five economic events to watch from June 17 to 21.

🇪🇺 CPI and Core CPI (m/m) — June 18, at 12:00 GMT+3

The busy trading week kicks off with the release of the European CPI and Core CPI (m/m) data. This highly anticipated economic indicator provides valuable insights into the inflationary pressures within the Eurozone, making it a crucial report for investors and traders alike. Market participants will be keeping a close eye on the monthly figures, which are expected to remain unchanged at 0.2%, in line with the previous month's reading.

On an annual basis, the CPI is also expected to hold steady at 2.6%, mirroring the previous release. Despite the lack of surprises in the forecasted figures, the Euro and its related currency pairs will be in the spotlight, as traders assess the potential impact of the data on the European Central Bank's monetary policy decisions. Additionally, the German stock index, DAX30, may experience some volatility in response to the inflation report, as it serves as a key benchmark for the European market sentiment.

🇺🇸 Retail Sales m/m — June 18, at 15:30 GMT+3

The upcoming release of the US Retail Sales m/m report is just around the corner. This crucial economic indicator provides valuable insights into consumer spending habits and the overall health of the economy. With an expected reading of -0.4%, down from the previous 0.0%, the report may shed light on the current level of demand-side inflation pressures.

Keep a close eye on EUR/USD, which has recently turned south and registered significant losses. The pair remains under pressure, trading at its lowest level since early May, slightly below 1.0700. The negative shift in risk sentiment has helped the US Dollar (USD) gather strength, while the impact of soft inflation data on the USD has started to fade as investors reassess the Federal Reserve's policy outlook.

Additionally, it's important to monitor key stock indices such as the Dow Jones, Nasdaq, and SPX500, as they may react to the retail sales data and provide further insight into market sentiment.

🇬🇧 CPI and Core CPI m/m — June 19, at 09:00 GMT+3

The upcoming release of the British Consumer Price Index (CPI) and Core CPI for the month has garnered significant attention, particularly for the GBP/USD trading pair. This month's figures are expected to show a month-on-month increase of 0.1%, a notable decline from the previous month's 0.6% rise. Additionally, on a yearly basis, the CPI is anticipated to drop to 2.9% from the prior 3.2%. Such a slowdown in inflation could influence market sentiment and monetary policy expectations.

As a result, the Pound Sterling demonstrated a robust recovery against the US Dollar, driving the GBP/USD pair to a fresh three-month high. Despite this momentum, resistance levels above the 1.2800 mark have proved challenging, with sellers re-emerging at this critical juncture.

🇬🇧 BoE Interest Rate Decision — June 20, at 14:00 GMT+3

The upcoming Bank of England (BoE) interest rate decision is a significant event for the financial markets, with the central bank widely expected to maintain the current rate at 5.25% when it meets. This follows a no-change decision on May 8. Unlike the May meeting, the June 20 decision will be accompanied by a brief statement rather than a full monetary policy report and press briefing. Therefore, if there is no change in interest rates, there will be limited guidance on the timing of any future adjustments.

One critical indicator to watch will be the voting patterns among the members of the Monetary Policy Committee (MPC). In the previous meeting, seven members voted to hold the rates steady, while two voted for a cut. It is anticipated that more members might lean towards a rate cut this time, but probably not enough to change the current rate.

🇪🇺 S&P Global Composite PMI — June 21, at 11:00 GMT+3

The upcoming release of the European S&P Global Composite PMI is set to be a key highlight at the end of this week, with expectations pointing to a slight decline. The PMI is projected to come in at 51.7, down from the previous reading of 52.2. This indicator, which tracks the economic health of both the manufacturing and services sectors, will be closely monitored for signs of economic momentum or slowdown in the Eurozone.

A PMI reading above 50 signifies expansion, so while a dip to 51.7 still indicates growth, it suggests a moderation in the pace of economic activity.

That's it for this week! 👋