The rally in risk is weighing on bonds as we head into the weekend, with stock market sentiment stabilized for now. As central banks rush to phase out the stimulus implemented during the pandemic, markets are one step ahead once again, and the focus has firmly moved away from inflation overshoots to growth risks. The ECB Forum on Central Banking, along with Durable Goods and GDP from the US, UK and Canada are in the spotlight next week.
Have a look at the most important events of the coming days in our usual weekly publication.
Monday – 27 June 2022
Durable Goods (USD, GMT 12:30) – Durable goods orders are expected to fall -0.4% in May with a -2.0% transportation orders drop, after a 0.5% headline increase in April that included a 0.7% transportation orders rise. Durable orders ex-transportation is pegged to rise 0.4%, after a 0.4% April increase. The I/S ratio should tick up to 1.82 from 1.81 in April, versus a 19-month low of 1.78 in January of 2021 and an all-time high of 2.48 in April of 2020 for a series extending back to 1992.
Tuesday – 28 June 2022
ECB President Lagarde Speech (EUR, GMT 08:30)
CB Consumer Confidence (USD, GMT 14:00) – Consumer confidence is expected to fall to a 16-month low of 100.0 from 106.4 in May. The present situation index is anticipated to slip to a 13-month low of 138.2 from 149.6 in May. The expectations index is expected to dip to a new 9-year low of 74.5 from 77.5 in May. Confidence is being pushed down by soaring prices due to supply chain disruptions, the war in Ukraine, huge mortgage rate gains, stock price declines, and the ongoing pull-back in the 2020-21 confidence lift from stimulus. Michigan sentiment fell to an all-time low of 51.7 in the first release for June from an 11-year low of 58.4 in May.
Wednesday – 29 June 2022
Gross Domestic Product (USD, GMT 12:30) – Revised Q1 GDP is expected to show an upward growth revision to -1.1% from -1.5%. We expect boosts of $25 bln for inventories, $4 bln for exports, $4 bln for nonresidential structures, and $1 bln for residential construction. Consumption should be revised down by -$11 bln, and intellectual property by -$2 bln. The revisions still leave a quarter with robust fixed investment growth, but with a big deterioration in the trade balance, a decline in government purchases, and a moderation in the pace of inventory accumulation. We see the big Q4-Q1 GDP zigzag as consistent with growth of 2.6% over the four quarters through Q3.
BoE Gov Bailey, Fed Chair Powell and ECB President Lagarde are due to participate in a panel discussion titled “Policy panel” at the ECB Forum on Central Banking, in Portugal, at 13:30 GMT.
Thursday – 30 June 2022
Gross Domestic Product (GBP, GMT 06:00) – GDP for Q1 is expected at 1.0% q/q and 6.5% y/y.
Core PCE Price Index (USD, GMT 12:30) – Expectations are for a rise at 0.5% for May personal income after a 0.4% April gain. A 0.6% rise in compensation is anticipated after a 0.6% gain, given a 0.3% May rise for both hours-worked and hourly earnings. We expect a flat figure for “current transfer receipts” as the pull-back with the fiscal cliff is now largely behind us.
Gross Domestic Product (CAD, GMT 12:30) – April’s GDP is expected at 0.5% m/m from 0.7% m/m.
Friday – 01 July 2022
ISM Manufacturing PMI (USD, GMT 14:00) – The ISM index is expected to fall to 55.5 after a rebound to 56.1 in May from a 2-year low of 55.4 in April, versus an 18-year high of 63.7 in March ’21, an 11-year low of 41.6 in April of 2020, and an all-time low of 30.3 in June of 1980.
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Andria Pichidi
Market Analyst
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