Week ahead: RBNZ and ECB rate decisions, U.S. CPI in focus

RBNZ and ECB policy decisions, U.S. CPI, Japan PPI in focus this week

Key inflation data and central bank decisions to come this week. Attention will shift to the RBNZ and ECB interest rate decisions each side of the midweek hump. U.S. CPI figures, Japanese PPI and FOMC minutes are also on the table.

The week will round off with several big earnings reports from the financial sector including J.P. Morgan (JPM) and BlackRock (BLK).

Finally, politically important UK GDP figures release as the last round of data confirmed technical recession and the country edges closer to a general election.

Here are the week’s key events:

Monday: Japan current account figures

Monday is a somewhat subdued start to the week as markets wait for key inflation data and central bank decisions to come. Forex traders may want to take note of current account figures out of Japan though.

Japanese Finance Minister Shunichi Suzuki highlighted the current account as one of the things driving volatility for the yen right now, as well as the decision to end negative interest rates and geopolitical risk. Risk of intervention is rising as the yen continues to slide; can we expect further shakeups following the historic recent shift in monetary policy?

Tuesday: RBNZ rate decision

Another relatively slow day for economic news will be largely characterised by traders waiting for a central bank decision from the Royal Bank of New Zealand overnight moving into Wednesday.

Scheduled for 3am BST, the RBNZ is expected to hold as inflation slows and the central bank has toned down its hawkish narrative. Last month’s RBNZ statement said, “risks to the inflation outlook have become more balanced", but all things considered, traders shouldn’t hold their breath for cuts just yet.

Finally, the early hours of Wednesday morning BST also see PPI figures out of Japan which may be useful in predicting the pace of decision making for the BoJ.

Wednesday: U.S. core CPI figures, FOMC meeting minutes

Launching into the main events for the week Wednesday has core CPI figures from the states as well as FOMC meeting minutes and an earnings report from Delta Airlines. Following last month’s decision to keep rates steady, core CPI remaining under control will reinforce the narrative of success for the Fed easing off the gas as it drifts in for a soft landing.

FOMC meeting minutes will offer further context on when this year’s inevitable rate cuts will come into play. However, the possibility for inconsistent or choppy inflation data may prove to be a spanner in the works for those expecting cuts thick and fast.

Earnings: Delta Airlines

Thursday: U.S. core PPI, ECB rate decision

Thursday gives us more inflation figures from the US in the form of core PPI accompanied by unemployment claims from the Department of Labor; more indicators for those predicting a timeline for Fed rate cuts.

Across the pond, the European Central Bank is expected to hold rates for now, although its newest board member, Piero Cipollone, recently indicated that the central bank is prepared to cut rates ‘swiftly’ and decisions will continue to be calibrated based on incoming inflation figures; a chance for cuts sooner than those currently expected in July

The ECB press conference that follows may spark volatility depending on how dovish the conversation is interpreted as.

Friday: BlackRock, Citigroup, JP Morgan earnings reports

Friday is a big day for US finance as earnings reports from institutions like BlackRock, Citigroup and J.P. Morgan provide a litmus test for the sector. In the UK conservatives will be keen to see if fresh GDP figures indicate an exit from the technical recession that closed 2023; a confirmation that has added to challenging conditions for the Rishi Sunak as the prospect of general election fast approaches.

Finally, the University of Michigan’s preliminary consumer sentiment and inflation expectation reports are the last noteworthy releases as the market closes for the weekend; is the U.S. remaining stubbornly strong in the face of expectations for interest rate cuts on the horizon?

Earnings: BlackRock, Citigroup Inc., JPMorgan Chase & Co., Wells Fargo

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