Events to Look Out for Next Week

• RBA Meeting Minutes (AUD, GMT 01:30) – The minutes could spark some light on RBA’s next actions. Note that the RBA is increasingly being seen as heading towards a policy tapering.
• Employment change & ILO rate (GBP, GMT 06:00) – UK Earnings with the bonus-included figure are expected to rise to 4.9% (3 Mo/y) in the three months to April. The UK ILO unemployment rate is expected to dip to 4.7%.
• US Retail Sales (USD, GMT 12:30) – Expectations are for a -0.6% May retail sales headline drop with a -0.1% ex-auto decline, following respective April figures of unchanged and -0.8% as the March pop from stimulus checks began to unwind.

Wednesday – 16 June 2021

• Retail Sales & Ind. Production (CNY, GMT 02:00) – Chinese Retail Sales are expected to ease to 14% from 17.7% last time and Industrial production is expected to grow by 8.9% from 9.8%.
• PPI, CPI & Retail Sales (GBP, GMT 06:00) – More UK data, with Inflation from producer and consumer spending both expected to show a rise for the month and on an annualized basis, with a growth at 1.8%y/y and 2.9% y/y respectively. Retail Sales may pullback to just 0.2%m/m in May. With virus restrictions gradually eased over the last few months as vaccinations progressed, the data could remain uneven, but survey data suggests that growth is broadening and strengthening now.
• Consumer Price Index and Core (CAD, GMT 12:30) – Canada’s CPI surged to a 3.4% pace in April from the 2.2% growth rate in March. The average of the BoC’s three core CPI measures was 2.1% in April, up from 1.9% in March. Both the total and core measures were a bit firmer than anticipated, but were in the rather wide range of projections for this report.  The May number however is anticipated slightly firmer at 0.4% m/m from 3.5% y/y.
• FED – Statement, Interest Rate Decision and Conference (USD, GMT 18:00) – The FOMC headlines next week with the meeting on June 15-16, but there is also a plethora of key data on tap including retail sales, production, manufacturing PMIs, and housing starts. Given the robust recovery, the continued improvement in the labor market, and the acceleration in inflation, we wouldn’t be surprised if policymakers start to think about discussing a taper, if not actually open up talks, but that there will be no imminent policy shifts. Rather a wait and see stance should prevail since the condition of “substantial further progress” on the goals has not been made, and as the data are still quite noisy. The bond market is showing no fear of the Fed and has clearly bought into the “transitory” view of inflation. Of interest, this meeting will include the new quarterly forecasts (SEP) where we expect to see modest revisions reflecting the recovery, including a narrowing in the range of GDP estimates around the current central tendency of 5.8% to 6.6%, with likely upward revisions to PCE chain prices. Also key, the funds rate estimates are likely to be largely maintained, though we could see a few more hawkish projections with boosts to high-end estimates, and a hike in the 2023 median to 0.4% from 0.1%.
• Gross Domestic Product (NZD, GMT 22:45) – The New Zealand Q1 GDP is anticipated to show a relatively small growth to 0.5% y/y and 0.1% q/q, from the previous -0.9% and -1.0% respectively, on the reopening of the economy.

Thursday – 17 June 2021

• RBA’s Governor Lowe speech (AUD, GMT 00:00)
• Employment and Unemployment Rate (AUD, GMT 01:30) – The Australian jobs market is expected to show a mixed employment report, with employment change at 15k growth from contraction at -30.6K but unemployment ticking up to 5.6% for May from 5.5% last month.
• SNB Interest Rate Decision and MPA (CHF, GMT 07:30) – As with other Central banks, no change is expected from the SNB with regards to interest rates. Last time the SNB stuck to its expansionary policy and to the wait and see stance like the rest of the central banks. This is unlikely to change anytime soon.
• Consumer Price Index and Core (EUR, GMT 09:00) –  On the inflation front, the manufacturing sector meanwhile is facing some near term headwinds from supply chain bottlenecks, which are also adding to short term inflation risks. Base effects from energy prices also contribute, and Lagarde highlighted base effects from the end to Germany’s temporary cut to the VAT rate. Headline inflation is seen at 1.9% this year, but it is expected to start falling again, and the forecast for 2023, both headline and core, are seen at just 1.4%, which clearly remains lower than what the ECB would like to see. This allows the central bank to maintain a very expansionary policy stance for now, although Lagarde did admit there was some discussion on purchases.

Friday – 18 June 2021

• BOJ Interest Rate, MP Statement and Press Conference (JPY, GMT 03:00-06:00)– It’s widely expected the BOJ will leave rates and asset purchases unchanged and to extend its pandemic relief program to support a fragile economic recovery, reinforcing expectations it will lag major counterparts in dialing back crisis-mode policies.
• UK Retail Sales (GBP, GMT 06:00) – Expectations are for the headline number to be 36.8% on a YoY basis, down from 42.4%, last time, and the MoM data for May to show lower at 1.8% from 9.2% last  time.