Week Ahead – Welcome relief

Further turbulence ahead?

Financial markets enjoyed a little reprieve last week following a raft of central bank announcements the week before. Next week sees the focus remain on policymakers, with many set to appear at the ECB Forum on Central Banking in Portugal.

Recessions have gone from being a potential consequence of high inflation and rapid monetary tightening to an increasingly likely scenario. Central banks are pushing back less and less against a period of negative growth, with Fed Chair Powell last week acknowledging it is “certainly a possibility”.

Investors are looking for any indication that inflation has peaked and is on a quick and sustainable path lower, enabling central banks to take the foot off the gas and avert too much damage to the economy. We may have to wait a while longer yet.

Fed commentary continues to dominate

ECB heading for a super-sized lift-off?

Boris in trouble?


Wall Street will continue to focus on the strength of the US consumer and pay close attention to personal income/spending data, another set of inflation readings, and a few key corporate earnings from the major retailers. A wrath of economic indicators are expected to confirm the trend of weakening business activity.  US consumer confidence is expected to post a sharp decline, as personal incomes struggle to keep up with inflation. Earnings from Nike, H&M, Bed Bath & Beyond, and Wall Greens could give further insight as to how sharp of deceleration we are seeing with consumer spending.     

Fed watchers will get more comments from Chair Powell as he attends the ECB Forum on Central Banking. Fed’s Daly, Mester and Bullard also have scheduled appearances.   

President Biden will also attend the G-7 summit, which could contain new measures aimed at easing the global food and energy crisis.       


A busy week for Christine Lagarde as she welcomes peers to the ECB Forum on Central Banking in Portugal. President Lagarde will make appearances throughout the week and traders will no doubt be clinging to her every word.

Flash inflation data on Friday is another highlight. Traders are already pricing in a 25 basis point hike in July then at least a couple of 50 basis points thereafter. There’s clearly room for more after a late start by the ECB and the June inflation data could be the catalyst for a super-sized lift-off next month. 

The gas stand-off with Russia isn’t easing up, ramping up the possibility of rationing this winter as the bloc struggles to refill reserves.


BoE Governor Andrew Bailey’s appearance at the ECB Forum on Wednesday, alongside ECB President Christine Lagarde and Fed Chairman Jerome Powell is clearly the highlight. The BoE has been reluctant to super-size its rate hikes for fear of deepening the economic slump. But with more and more central banks moving in that direction, the MPC could be tempted soon. Perhaps Bailey will drop such hints on Wednesday.

Data is mostly tier two and three with revised GDP and manufacturing PMI the highlight. Pressure is ramping up on Boris Johnson after the Conservatives’ double by-election defeat and the resignation of the Tory Party Chair, Oliver Dowden.


There are various data releases next week that may shed some light on how the economy is holding up against the backdrop of severe Western sanctions and major shifts in interest rates and the currency. Unemployment is expected to jump to 4.5% from 4% in May, with retail sales slipping 5.5% at the same time. Real wages are also expected to have slipped 6% year on year.

No doubt the Kremlin will be focused on events in the Bavarian Alps and Madrid next week, with Russia’s invasion of Ukraine top of the agenda of the G7 and NATO summits.

South Africa

Only tier two and three data next week, with PPI inflation probably the highlight as the SARB races to get control of inflation. 


The CBRT remains committed to its monetary policy experiment no matter the cost. It kept interest rates unchanged at 14% on Thursday despite inflation running at 73.5%. Next week offers mostly tier two and three data including the manufacturing PMI and retail prices on Friday. 


SNB Chairman Thomas Jordan suggested this week that inflation data highlights the need to tighten monetary policy further after last week’s surprise 50 basis point hike. He said it’s unclear when that would be though so traders will be on alert at all future meetings. Considering the SNBs history of surprises, we can’t ignore the possibility of an inter-meeting hike. Retail sales and manufacturing PMI are also on offer next week.


China releases industrial profits on Monday but most attention will be on official PMIs on Thursday, and Caixin PMIs on Friday. The data should show a rebound in both manufacturing and services following the Shanghai and Beijing reopenings. Weaker numbers will prompt slowdown fears and prompt the selling of China equities.


India’s balance of payments and PMIs on Friday have downside risks thanks to the wheat export ban, droughts, stress in the electricity sector and a weak rupee. That could prompt more INR selling with it remaining near record lows this week despite US dollar strength fading internationally.


Australian retail sales on Wednesday has downside risks which could prompt slowdown fears. That could cause short-term weakness in the Australian dollar. Otherwise, local equities continue to track US markets although if resource price weakness persists next week, that could start to weigh on local equities.

The Australian dollar has downside risk as it finishes at weekly lows. Its movements continue to reflect its role as a proxy for global investor sentiment by traders.

New Zealand

New Zealand releases ANZ business confidence on Thursday and ANZ consumer confidence on Friday. Both have downside risks as interest rate rises and cost-of-living increases continue to bite, and weak data could spur local equity selling.

Poor numbers could weigh on the New Zealand dollar as well, which like the Australian dollar, is finishing the week near recent lows. Like AUD, NZD’s overall direction continues to be dictated by swings in risk/recession sentiment among international investors.


Japan retail sales should improve on Wednesday as it continues its reopening phase, and industrial production Thursday should benefit from a weaker yen. However, the Nikkei 225’s direction has been highly correlated with the Nasdaq of late and that could continue. Friday’s Tankan survey may cause some short-term volatility.

USD/JPY remains highly volatile and entirely correlated to the US/Japan interest rate differential. We may still be a long way from Bank of Japan intervention.


Singapore PPI should remain near 30% YoY next week but appears mostly priced into the market. Slowdown concerns, reflecting the situation in China and the US will continue to weigh on local equities. Inflation readings this week appear to have removed the immediate risk of the MAS tightening policy before its scheduled October meeting.

Economic Calendar

Saturday, June 25

Economic Events

Spain’s government holds an extraordinary cabinet meeting to address inflation concerns

Sunday, June 26

Economic Events

G-7 summit two-day event takes place in the Bavarian Alps

Monday, June 27

Economic Data/Events

US durable goods

ECB Forum on Central Banking; speakers include ECB President Lagarde, Fed Chair Powell, BOE Gov Bailey

UK Chancellor Sunak takes questions from MPs

Mexico trade

China industrial profits

Japan leading index

Tuesday, June 28

Economic Data/Events

US wholesale inventories, US Conference Board consumer confidence

Mexico international reserves, unemployment

Primary elections in the US states of Colorado, Illinois, New York, Utah, Mississippi, South Carolina, Oklahoma and Nebraska.

BOE Deputy Governor Cunliffe speaks

Fed’s Daly speaks to LinkedIn’s chief economist

Wednesday, June 29

Economic Data/Events

US Q1 GDP (third reading)

NATO Summit

Fed’s Mester speaks on a panel at the ECB Forum

Fed’s Bullard speaks at a virtual community development event

Germany CPI 

Russia unemployment

Australia retail sales

Thailand capacity utilization, production index

Russia industrial production

Eurozone economic confidence, consumer confidence

Japan retail sales, consumer confidence index

EIA crude oil inventory report

Thursday, June 30

Economic Data/Events

US personal income and spending data, PCE readings, initial jobless claims

France CPI


Czech Republic GDP

Sweden (Riksbank) central bank rate decision: Expected to raise rates 50bps to 0.75%

South Africa trade

Thailand trade

Eurozone and German unemployment

Australia job vacancies

Japan industrial production, housing starts

Thailand BoP

China PMI

India fiscal deficit, eight infrastructure industries

New Zealand business confidence, activity outlook

Singapore money supply

Friday, July 1

Economic Data/Events

US construction spending, ISM Manufacturing, light vehicle sales

Susan Collins takes office as president of the Boston Fed

Eurozone CPI, manufacturing PMI

Poland CPI

Eurozone manufacturing PMI

Germany manufacturing PMI

UK manufacturing PMI

Australia manufacturing PMI

Thailand manufacturing PMI

India manufacturing PMI

New Zealand building permits, house prices, consumer confidence

Australia house prices, commodity index

Singapore home prices

Thailand forward contracts, foreign reserves

Japan vehicle sales, Tokyo CPI, unemployment, PMI

China Caixin manufacturing PMI

Russia GDP

Sovereign Rating Updates

France (S&P)

Finland (S&P)

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Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.