What mattered last week and a preview of the week ahead 24th June

What mattered last week:

  • The S&P 500 finished the week +1.8%, to lock in 3 straight weeks of gains as the Fed expressed a willingness to cut rates and it was confirmed that Presidents Trump and Xi would meet at the G20 summit.
  • The ECB and the RBA also indicated they were considering further easing of monetary policy.
  • The prospect of lower interest rates sent gold to 5-year highs as it closed the week +4.50% at U.S. $1400.
  • Crude oil finished the week +10% after the downing of a U.S. drone and news that Iran would resume uranium enrichment in late June.
  • In Australia, the ASX200 made fresh post-GFC highs and is now just 3% below its all-time high.
  • The AUDUSD closed above .6900c as the U.S. dollar fell in response to a more dovish than expected FOMC meeting.

For the week ahead, the key events are:

Australia: RBA Governor Philip Lowe on a panel at the ANU (Monday), private sector credit (Friday).

  • RBA Governor Philip Lowe (Monday): >Is on the panel at the ANU Crawford Australian Leadership Forum in Canberra. The focus is likely to be on the global economic outlook. However, there may be an opportunity for Governor Lowe to provide further guidance on monetary policy ahead of the July board meeting. Currently, market pricing shows 20bp or 80% of a cut priced for July.

New Zealand: Balance of trade (Tuesday), RBNZ interest rate meeting (Wednesday), ANZ business confidence (Thursday), ANZ consumer confidence (Friday).

China: Industrial profits (Thursday).

Japan: BoJ interest rate meeting minutes (Tuesday), retail sales (Thursday), G20 summit starts (Friday).

U.S.: S&P/Case-Shiller HPI, consumer confidence, new home sales (Tuesday), durable goods (Wednesday), pending home sales, Chicago PMI (Thursday), personal income and spending (Friday). 

  • Durable goods (Wednesday): Durable goods data has been soft of late, with concerns mounting that trade tensions are disrupting supply chains.  After a chunky -2.1% decline in April, the headline is expected to rise by +0.2% in May.

Fed speakers on the wires this week include Harker, Williams, Bostic, Fed Chairman Powell and Bullard.

Canada: Wholesale sales (Tuesday), monthly GDP and PPI (Friday).

Euro Area: German IFO (Monday), German Gfk consumer confidence (Wednesday), EA business confidence, economic sentiment and German inflation (Thursday), EA flash CPI (Friday).

  • Euro flash CPI (Friday): After starting the year at 1.1%, core inflation has been trending lower and is likely to print at 0.8%yoy in June.

UK: Gfk consumer confidence (Friday).

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