Events to Look Out for Next Week

• Gross Domestic Product (JPY, GMT 23:50) – Gross Domestic Product should impede in Q1 and reveal headline growth of -4.8% y/y and -1.2% q/q.

Tuesday – 08 June 2021

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• Economic Sentiment (EUR, GMT 09:00) – German June ZEW economic sentiment is seen to have declined at -41.3 compared to -40.1 in May.
• Gross Domestic Product (EUR, GMT 09:00) – Gross Domestic Product is seen stable at -0.6% contraction in Q1, confirming that the bloc saw another technical recession over Q4/Q1 thanks to lockdown measures. Looking ahead confidence data suggest a strong rebound already in the second quarter, thanks to a come back in global demand, but also vaccination programs, which have started to pick up speed and at least offer hope that things will get back to “normal” over the summer.

Wednesday – 09 June 2021

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• Consumer Price Index (CNY, GMT 01:30) – China’s recovery appears to be broadening, as a key manufacturing sentiment measure improves. CPI is expected to accelerate to a 1.0% y/y pace in May following the 0.9% growth last month,  more than double the 0.4% y/y from March. That’s the fastest pace of acceleration since the 1.7% pace from September 2020, with much of the pick up a function of base effects (CPI dipped -0.3% on the month with weakness in pork prices). Consumer prices were in deflation last November, and in January and February this year.
• Interest Rate Decision and Statement (CAD, GMT 14:00) – Two-straight months of Canada labor market softness will likely keep the BoC steady as it goes, following the surprise hawkish stance taken at its last meeting, where the Bank tapered its QE program. The BoC is expected to raise its current key interest rate of 0.25% in late 2022 and this will result in a stronger Loonie.

Thursday – 10 June 2021

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• G7 Meeting 
• Interest Rate Decision and Press Conference (EUR, GMT 11:45 & 12:30)  – The focus at next week’s council meeting will clearly be on monthly PEPP purchases as there is no doubt that the ECB will leave interest rates, the overall PEPP framework and the APP program, as well as the forward guidance on rates and APP unchanged. Up for discussion are monthly purchase volumes, which the ECB decided step up “significantly” back in March and which it vowed to review at a regular basis. It is expected that the central bank will tweak the language and adjust purchase volumes, with Lagarde likely to try and sell the likely reduction also as technical adjustment over the quieter summer months.
• Consumer Price Index (USD, GMT 12:30) – It is expected that May gains of 0.2% for both the CPI headline and core, following April gains of 0.8% for the headline and 0.9% for the core. CPI gasoline prices look poised to ease -0.9% in May, despite the Colonial pipeline disruption that lifted prices on the east coast. As-expected May figures would result in a 4.5% headline y/y increase, following a 4.2% pace in April. Core prices should show a 3.3% y/y rise, up from 3.0% y/y in April.

Friday – 11 June 2021

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• G7 Meeting 
• Industrial and Manufacturing Production (GBP, GMT 06:00) – Industrial and Manufacturing Production are expected to have fallen from last month, with both providing a growth at 1.2% m/m and 1.5% m/m in April.