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As we move into the week of May 20-24, several significant economic events are poised to influence the financial markets. This article provides a comprehensive outlook on the anticipated happenings, focusing on the Reserve Bank of New Zealand (RBNZ) meeting, U.K. inflation data, and Purchasing Managers’ Index (PMI) releases. The term Markets This Week will guide our exploration of these critical events and their potential impacts on global economies.
Markets This Week: Monday: A Quiet Start
European and Canadian Holidays
Markets in Europe and Canada will start the week quietly due to public holidays. This subdued start will likely give investors time to digest remarks expected from several Federal Open Market Committee (FOMC) members in the United States.
Tuesday: Australian Sentiment and Canadian Inflation
Australian Economic Indicators
On Tuesday, Australia will release its Westpac Consumer Sentiment Index and the minutes from the latest monetary policy meeting. Last month, the Westpac consumer sentiment fell to 82.4, reflecting consumer pessimism amid economic uncertainties, high living costs, and inflation concerns. These factors are likely to continue influencing Markets This Week in Australia.
Canadian Inflation Data
Later in the day, attention will shift to Canada as it publishes its inflation data. The consensus for the month-over-month Consumer Price Index (CPI) is 0.5%, slightly lower than the previous 0.6%. Year-over-year CPI is expected to slow to 2.7% from 2.9%. The Bank of Canada (BoC) will scrutinize this data closely, as it is the last significant inflation report before their June meeting.
FOMC Remarks
In the United States, remarks from FOMC members on Monday and Tuesday will provide insights into future monetary policy directions. These statements could create fluctuations in Markets This Week as investors gauge the likelihood of changes in interest rates.
Wednesday: RBNZ Decision and U.K. Inflation
RBNZ Monetary Policy Announcement
Wednesday’s highlight will be the RBNZ monetary policy announcement. The central bank is expected to maintain the Official Cash Rate (OCR) at 5.5%. The RBNZ is likely to reiterate the need to keep the OCR at this level for an extended period to achieve its inflation target of 1-3%. New Zealand’s recent economic indicators, including softer GDP data and higher-than-expected Q1 inflation, will be pivotal in Markets This Week.
U.K. Inflation Data
Simultaneously, the United Kingdom will release its inflation data. The market expects a slowdown in the headline CPI to 2.1% year-over-year and core CPI to 3.6%. The Bank of England (BoE) has been particularly concerned about high services inflation, which is anticipated to have decreased to 5.4%. This data will be crucial for Markets This Week, potentially influencing the BoE’s decisions on interest rates.
U.S. Economic Data
In the U.S., existing home sales data and the FOMC meeting minutes will be released. These reports will offer further insights into the health of the housing market and the central bank’s economic outlook, impacting Markets This Week.
Thursday: Global PMIs
Flash Manufacturing and Services PMIs
Thursday will be dominated by the release of flash manufacturing and services PMIs from several major economies, including Australia, Japan, the eurozone, the U.K., and the U.S. The consensus for the U.K. flash manufacturing PMI is a slight rise to 49.5 from 49.1, while the flash services PMI is expected to drop to 54.7 from 55.0. These indices, though showing improvement, indicate ongoing challenges in the manufacturing sector, which will be critical for Markets This Week.
U.S. New Home Sales
Additionally, the U.S. will publish new home sales data. This data will provide a snapshot of the housing market’s current state, further influencing Markets This Week.
Friday: U.K. and Canadian Retail Sales, U.S. Durable Goods
U.K. Retail Sales
The week will conclude with the U.K. reporting its month-over-month retail sales figures. Retail performance is a key indicator of consumer confidence and spending, essential for assessing the health of the economy and its impact on Markets This Week.
Canadian Retail Sales
Canada will also release its retail sales data, which will be closely watched by the BoC and investors. Retail sales trends can signal shifts in consumer behavior and economic conditions, impacting Markets This Week.
U.S. Durable Goods Orders
In the U.S., durable goods orders for April are expected to decline by 0.5% after a 0.9% increase in March. Excluding transportation, durable goods orders are projected to see a modest rise of 0.3%. This data will be a critical factor for Markets This Week, providing insights into manufacturing sector health and broader economic trends.
Conclusion
Markets This Week are set to be influenced by a series of significant economic events, from central bank meetings and inflation data to PMI releases. Investors and analysts will closely monitor these developments to gauge economic health and future policy directions. The outcomes of these events will provide critical insights and potential market-moving information, making this a pivotal week for global financial markets.
Read more: UK Inflation Prediction: April Figures Expected to Hit 2% Target
