Two key central bank decisions sit at the top of investors’ radar this week, after renewed global growth concerns saw stocks sell off on Friday while bonds yields fell to record lows.
- The U.S. Federal Open Market Committee begins its two-day meeting on June 14. Expectations for a summer rate hike were drastically reduced when a sharply lower-than-expected May nonfarm payroll number cast fresh doubts over the health of the U.S. economy. In the build-up to the June meeting, many Fed officials had made dovish comments. Following the dismal jobs report, Fed chair Janet Yellen spoke at an event in Philadelphia last Monday, where she struck a generally positive tone on the U.S. economy and insisted that the Fed needed to raise rates. She stepped back, however, from putting a time frame.
The Bank of Japan (BOJ) begins its policy meeting on June 15. Experts agreed the BOJ might surprise markets with additional easing this week, since the G7 meeting is now over. The yen, considered a safe-haven play, has climbed against the dollar, despite the BOJ’s decision earlier this year to introduce a negative interest rate policy
- On the data front the market will focus on CPI and retail sales from the United States, GDP from New Zealand and Employment report from Australia. There will be also CPI from United Kingdom, as well as the BOE’s meeting.
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