This week enters the “Super Central Bank Week”. The central banks of the United States, Taiwan, the United Kingdom, and Japan will all announce monetary policy decisions. It is expected that the United States and the United Kingdom will continue to increase their rates in May, raising interest rates by 2 yards and 1 yards respectively. Taiwan is almost certain to raise interest rates. , and Japan stood firm.
This week’s trading notes (0613-0617)
1. The Fed’s June decision-making meeting, the latest economic forecast
This week is Super Central Bank Week, with Thursday as the main event and nowhere more than the US Federal Reserve (Fed).
The market expects the Fed to raise interest rates by 2 yards (50 basis points) this week, raising the target range for the federal funds rate to 1.25-1.50%. But after the U.S. consumer price index (CPI) unexpectedly surged to a 40-year high in May released on Friday, the market feared that high inflation may prompt the Fed to raise interest rates more sharply or issue higher rate forecasts.
While most economists still believe that the Fed will maintain a 2-yard rate hike at least until the end of September, some Wall Street analysts have called for a 3-yard rate hike (75 basis points) as soon as this week. Futures market traders predict that the probability of a 3-yard move in July has also climbed to about 50%.
The Fed will release the latest economic forecasts at this meeting, including a point chart of gross domestic product (GDP), inflation and interest rate forecasts. The market will also focus on Chairman Powell’s speech at the post-meeting press conference to scrutinize the summer and autumn of this year. outlook for rate hikes.
2. Super Central Bank Week: Taiwan, Japan, UK, Switzerland, Brazil
Many central banks around the world set off a wave of interest rate hikes. Taiwan’s central bank is almost certain to raise interest rates on Thursday. The market estimates that it may raise interest rates by 1 yard.
The Bank of England (BOE) is also expected to raise interest rates by one rate on Thursday, raising the benchmark interest rate to 1.25%. Brazil’s central bank is expected to continue raising interest rates on the same day, but the increase may be smaller than in May.
On the other hand, Japan and Switzerland may go the other way and keep the status quo loose.althoughJapanese YenThe depreciation is astonishing, and the Governor of the Bank of Japan (BOJ, Bank of Japan) Haruhiko Kuroda recently reiterated that the monetary policy will remain loose, and inflation is only a temporary phenomenon.Japanese YenThe depreciation helped boost Japanese corporate earnings. The Swiss National Bank (SNB) is also likely to keep rates negative.
3. Economic data such as US retail sales
While markets are closely watching the Fed’s decision-making meeting, analysts cautioned that U.S. retail sales for May, due this week, could slow economic growth if the results show that high inflation continues to cause weak consumption.
The US will also release May producer price index (PPI), housing starts and building permits and other housing market data this week.