• Markets expects the Fed to hold rates steady at 5.50%
  • BoE pushes for a near-term rate
  • BoJ to announce their latest rate decision

This week, attention draws to three key points: the trajectory of US inflation, rate decisions from the Federal Reserve and Bank of Japan, and finally, important data releases from the UK.

The US

Inflation figures in the US, such as the Consumer Price Index (CPI) y/y and Core CPI m/m are scheduled for release on Wednesday, June 12 at 4:30 PM (Dubai Time). Markets anticipate both figures to hold steady at 3.4% and 0.3%, respectively. If inflation continues to fall, this could boost the likelihood of interest rate cuts, especially as the economy shows signs of weakness. Some are even hoping for a cut in July. However, if inflation rises more than expected, this could worry investors, causing recession fears to reemerge.

On Wednesday, June 12, Federal Funds are set to be released at 10:00 PM (Dubai Time). Markets forecast the rate to remain as is at 5.50%. All eyes will focus on how many rate cuts officials are expected to signal for the remainder of 2024.

The UK

On Tuesday, June 11, 2024, at 10:00 AM (Dubai Time), markets await the release of Claimant Count Change, a crucial jobs report. Following closely on Wednesday at 10:00 AM is Gross Domestic Product (GDP) data, a critical gauge of economic activity. Traders will closely watch whether these two data points indicate enough easing to potentially push the Bank of England towards a near-term rate cut.

Japan

Finally, on Friday, the BOJ is scheduled to announce its interest rate decision. Market expectations suggest the rate will likely hold steady at 0.10%. However, there is a 70% probability that Japan’s central bank may consider raising interest rates by around 0.10% in July. This speculation arises as the BOJ contemplates reducing government bond purchases starting from its upcoming June meeting. Such a move is typically viewed as a step towards tightening monetary policy, a measure taken when the economy exhibits signs of growth.