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The UK, US and the Eurozone in the week ahead

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  • More market holidays
  • Rate decisions from the ECB and RBA
  • Earnings season winds down

Monday 6th June

It’s another holiday-shortened week with breaks today for Australia, New Zealand, Switzerland, and much of Europe including France and Germany. Yet from Australia we have the MI Inflation Gauge, Job Advertisements, and the AIG Services Index. We also have China’s Caixin Services PMI. The first quarter earnings season is dribbling to a close now, and today’s top reports come from Coupa Software, and Acura Pharmaceuticals.

Tuesday 7th June

Overnight we get the latest update on the British Retail Consortium’s Retail Sales Monitor. From Japan we have Average Cash Earnings, Household Spending and Leading Indicators. We also have an interest rate decision from the Reserve Bank of Australia (RBA). Last month the RBA increased its headline Cash Rate for the first time since October 2009. A rise was largely expected. But the RBA managed to surprise analysts by raising rates to 0.35% from 0.10%. The broad assumption was for an increase of 15 basis points. Then we have German Factory Orders followed by the Euro zone’s Sentix Investor Confidence survey. The latter plunged into negative territory after Russia invaded Ukraine and has yet to recover. It currently at levels last seen in the early summer of 2020 as Europe and the rest of the world was struggling to come to terms with the economic implications of the coronavirus pandemic. Significant earnings reports include Casey’s General Stores, Orion Energy, Hello Group and ReneSolar.

Wednesday 8th June

It’s a busier day for economic releases, but it’s mostly second order data and unlikely to affect markets dramatically. From Japan we have Bank Lending, the Current Account, Final GDP and the Economy Watchers Sentiment index. We then have Swiss Unemployment, German Industrial Production, the French Trade Balance, Italian Retail Sales, the UK’s Halifax House Price Index and Construction PMI. From the US there’s Wholesale Inventories and weekly Crude Oil Inventories. First quarter earnings reports come from American Software, Capstone Green Energy, and Campbell Soup.

Thursday 9th June

Overnight we have the UK’s RICS House Price Balance and China’s Trade Balance, M2 Money Supply and New Loans. Then we have a rate decision from the European Central Bank (ECB), along with its Monetary Policy Statement and a press conference hosted by ECB President Christine Lagarde. The ECB has held its Main Refinancing Rate unchanged at zero since March 2016. It continues to hold off from tightening monetary policy even as inflation continues to rise. Last week’s Headline Flash CPI hit its seventh consecutive record high, coming in at 8.1% well above the bank’s 2% target rate. Could this be the meeting when we finally see movement? The consensus view is: ‘no’. The day is rounded off by the latest update on US Weekly Unemployment Claims. Today’s major earnings reports include Seneca Foods, DocuSign, Stitch Fix, Nio Inc, Vail Resorts, and Signet Jewellers.

Friday 10th June

We round off the week with updates on Japanese PPI, and Chinese PPI and CPI. Then we have Italian Industrial Production and UK Consumer Inflation Expectations. Later, we have Canadian employment data and Capacity Utilisation. But the most important data update is US CPI. This key inflation measure that is the prime focus for the Federal Reserve. The Headline CPI, which includes food and energy, hit a 41-year high of +8.5% year-on-year this March. It subsequently dipped to +8.3% in April, raising speculation that US inflation may have peaked. If so, then this may take some pressure off the Federal Reserve, leading them to be less aggressive when it came to tightening monetary policy. Certainly, there will be relief amongst investors if the May data comes in lower than April’s. But it’s important to remember that inflation remains near multi-year highs and is still four times above the Fed’s preferred target. Rounding off the week we have US Consumer Sentiment and Inflation Expectations. Earnings come from UP Fintech Holdings.

David Morrison is an Analyst with Trade Nation. Trade Nation was set up with the specific remit to help customers realise their trading goals by changing the way they engage with the financial markets. As well as providing full transparency and making sure all customers get a fair deal, Trade Nation is fully regulated. This means customers can be confident they’re getting the trading experience they deserve. Visit www.tradenation.com to find out more

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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