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UK inflation surprises significantly to the upside

Emily Nicol
Chris Scicluna
  • Reuters Tankan survey signalled a pickup in Japan’s recovery momentum, with auto manufacturers benefitting from an easing in supply constraints
  • Fed Chair Powell expected to deliver a relatively hawkish message before Congress, reiterating that further interest rate hikes are likely this year

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BoE takes the spotlight this week

Emily Nicol
Chris Scicluna
  • BoE expected to hike Bank Rate by a further 25bps, but in the event of a sizeable upside surprise to May’s CPI report we wouldn’t rule out a larger 50bps increase
  • Flash euro area PMIs likely to point a further moderation in economic recovery momentum
  • Japanese CPI figures expected to report a slight easing in headline inflation, but a further increase in underlying price pressures
  • Fed Chair Powell’s monetary policy testimony to Congress likely to reiterate that the current inflation outlook justifies further policy tightening this cycle

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BoJ resists temptation, leaving policy unchanged

Chris Scicluna
Emily Nicol
  • Detailed inflation data and labour cost and slack figures in focus in the euro area
  • BoE household inflation attitudes survey to be closely watched ahead of next week’s policy decision
  • Michigan consumer survey expected to suggest that US consumer sentiment remains soft as price expectations remain elevated

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ECB to hike interest rates

Chris Scicluna
Emily Nicol
  • PBoC cuts 1-year loan rate as Chinese recovery momentum ebbs
  • Retail sales and IP reports due on a busy day for US data after the Fed’s hawkish pause
  • Net trade on track to provide a boost to Japan’s GDP growth

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UK GDP posts modest growth in April

Chris Scicluna
Emily Nicol
  • Fed set to pause tightening cycle, focus on dot-plot and guidance for near-term policy path
  • Euro area IP to have risen in April, but will fail to reverse the weakness at the end of Q1

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