Uncertainty Looms? Data To Illuminate US Inflation Path

Wednesday, 10 July 2024, 04:00 – RBNZ Interest Rate Decision

In May, the Reserve Bank of New Zealand (RBNZ) decided to maintain the Official Cash Rate (OCR) at 5.50%. This decision reflects a commitment to keeping monetary policy restrictive to manage inflationary pressures and ensure that inflation returns to the target range of 1-3% by the end of 2024. Given the current economic conditions and the RBNZ’s focus on reducing inflation, it is likely that the RBNZ will maintain a restrictive monetary policy stance and will likely maintain the interest rate at its current level in the near term.

Thursday, 11 July 2024, 08:00 – UK GDP (MoM) (May)

The latest UK GDP data (MoM) for April 2024 showed that the economy remained flat at 0.0%, following a 0.4% increase in March 2024. This stagnation is attributed to declines in industrial output and construction, which offset growth in the services sector. The manufacturing sector, particularly pharmaceuticals and food products, faced significant challenges, while the services sector showed modest growth. Given the current economic conditions, the outlook for next GDP release will be expected to remain cautious given the continued challenges in the manufacturing and construction sectors might constrain overall economic growth.

Thursday, 11 July 2024, 14:30 – US CPI (YoY) (Jun)

In May, the US Consumer Price Index (CPI) for year-over-year stands at 3.3%, marginally below the forecast and last month’s figure of 3.4%. This consistent CPI suggests that inflationary pressures have been relatively controlled, likely due to factors like stabilizing energy prices, food costs, and housing expenses. Given the recent trend, the outlook is for inflation to gradually decrease, slowly returning to the Federal Reserve’s target of 2%.

Friday, 12 July 2024, 14:30 – U.S PPI (MoM) (Jun)

The latest U.S. Non-Farm Payroll (NFP) data for May, revealed a notable increase of 272,000 jobs in May, surpassing both expectations of 182K and the average monthly gain of 232,000 over the past year. Significant growth was observed in sectors such as healthcare, government, leisure and hospitality, and professional, scientific, and technical services. Despite concerns about economic slowdown, the job market remained resilient, buoyed by robust employment gains in essential services and government roles. Given the strong performance in May, forecasts for the upcoming NFP report lean towards cautious optimism. However, as the ADP report serves as an early indicator for the Non-Farm Payrolls (NFP), the market is anticipated to await the ADP data release for initial signals.