Weekly Outlook: 10 June – 14 June 2024


Weekly Outlook: 10 June – 14 June 2024


  • Tuesday: UK Labor Market report, US NFIB Small Business Optimism Index.
  • Wednesday: Japan PPI, China CPI, UK GDP, US CPI, FOMC Policy Decision.
  • Thursday: Australia Labor Market report, Swiss PPI, Eurozone Industrial Production, US PPI, US Jobless Claims.
  • Friday: New Zealand Manufacturing PMI, BoJ Policy Decision, US University of Michigan Consumer Sentiment.



Expectations for April's month-over-month GDP growth are set to drop to 0.1%, down from 0.4% in the previous month. To recap, March saw a significant boost in growth, with the GDP increasing from 0.1% to 0.4%, resulting in a first-quarter quarterly growth rate of 0.6%, compared to a 0.3% contraction in the last quarter of 2024, with growth recorded in 10 out of 14 subsectors. Analysts at Investec highlight that the ongoing momentum from rising real incomes and a boost in the manufacturing sector could continue to drive growth.

Additionally, a substantial increase in the national living wage and pensions should support growth in the second quarter. However, there are concerns about whether April saw any positive month-over-month growth in GDP, as there might have been a rebound effect from March’s strong retail and hospitality gains, potentially skewed by Easter timing. Analysts at Investec also pointed out that April’s retail sales were affected by very wet weather, which reduced demand, along with more frequent rail strikes compared to March. From a policy standpoint, this release is unlikely to be significant, as the Monetary Policy Committee remains primarily focused on services inflation and labor market developments, which will be updated on Tuesday.



Headline CPI is anticipated to increase by 0.2% month-over-month in May, down from 0.3% in the previous month, while the core CPI is expected to rise by 0.3% month-over-month, maintaining the previous rate. The May CPI data will be released just hours before the Federal Reserve's June policy announcement, where the FOMC is expected to keep rates unchanged. In mid-May, Fed Chair Powell noted that although there was little progress in reducing inflation in the first quarter, the Fed has made significant strides in controlling prices. He emphasized the importance of patience, acknowledging that the effects of restrictive policies might take longer to manifest. Powell expressed confidence that inflation would eventually decrease to levels seen last year.

Wells Fargo commented that April marked progress in curbing inflation after price growth increased in the first quarter, but the FOMC needs further evidence of a downshift in inflation to gain the confidence required to consider reducing the fed funds rate. Wells Fargo anticipates that May's data will not indicate rapid progress toward the Fed's inflation target but should demonstrate that the first quarter's inflation surge has diminished. They predict a 0.1% month-over-month increase in headline CPI and a 0.3% increase in the core rate. The expected easing in the headline CPI is attributed to an unusual decline in gasoline prices for this time of year. Core inflation drivers remain largely unchanged from April, with a continued drop in vehicle prices and more modest declines in other core goods. However, prices for core services are expected to rise by 0.4% month-over-month for the second consecutive month, reflecting a slower moderation in housing and other services inflation.



Analysts widely expect that the FOMC will maintain interest rates between 5.25-5.50% in June. Attention will shift to the updated economic projections, especially regarding the anticipated number of rate cuts this year. The March forecasts indicated three rate cuts for 2024, but analysts suggest that the updated projections might reduce this expectation to two cuts or even fewer. Focus will also be on the inflation forecasts; in the March Summary of Economic Projections (SEP), the Fed predicted that headline PCE inflation would decrease to 2.4% year-over-year this year, and the core rate of PCE would drop to 2.6% year-over-year (April data recorded 2.7% and 2.8%, respectively). The SEP did not foresee inflation returning to the Fed's 2% target until 2026.

Economists at Bank of America believe the Fed will raise its inflation forecast at the June meeting, making it unlikely they will cut rates soon after. BofA expects only one rate reduction in December, citing a resilient but softening economy and a cooling labor market. According to a Reuters poll, nearly two-thirds of economists (74 out of 116) anticipate the first rate cut in September, with five expecting a cut in July. Regarding the number of cuts, about 60% (68 out of 116) foresee two 25-basis-point reductions this year, while 33 expect one or no cuts, and 15 predict more than two cuts. Among 21 Primary Dealers polled, 10 expect the Fed to cut rates once or not at all this year.


The Bank of Japan (BoJ) is expected to maintain its current policy settings, with markets assigning only a 15% chance of a 10 basis point hike, and the first full hike of this magnitude is priced in for the September 20th meeting. The JGB purchase program is expected to remain flexible. Last month’s national core CPI year-over-year for April aligned with expectations at 2.2%, down from 2.6%. GDP has been concerning, with a contraction in Q1 posing a challenge for the BoJ, which has been cautiously preparing for future rate hikes. Household spending, which constitutes over half of Japan’s GDP, was a significant drag. Recent housing spending data released on June 7th continue to show a fragile picture [All Household Spending year-over-year for April at 0.5% vs. expected 0.6% (previous -1.2%); month-over-month -1.2% vs. expected 0.2% (previous 1.2%)].

In recent commentary, BoJ Board Member Nakamura stated that based on current data, maintaining the current policy is appropriate, and raising interest rates now would be "premature." Governor Ueda echoed this sentiment, indicating that the BoJ is proceeding cautiously regarding interest rates.





Disclaimer: This material is provided for informational purposes only and does not constitute financial, investment or other advice. No opinion contained in this material constitutes a recommendation by Trive International or its author as to any particular investment, transaction or investment strategy and should not be relied upon in making any investment decision. In particular, the information does not consider the individual investment objectives or financial circumstances of the individual investor Trive International shall not be liable for any loss, damage or injury arising from the use of this information. Trive International may or may not be able to provide equity in the companies. The value of your investment may go down as well as up.



No comments

Leave a comment
Your Email Address Will Not Be Published.



TriveHub, where financial empowerment begins. 

Explore our comprehensive financial education platform, where market insights, expert guidance, and premium content come together to shape your investment journey. Whether it's stocks, currencies, or cryptocurrencies that pique your interest, we provide the knowledge you need to make informed decisions.
All financial products traded on margin carry a high degree of risk to your capital. They are not suited to all investors, and you can lose more than your initial deposit. Please ensure that you fully understand the risks involved and seek independent advice if necessary. For further information, please see our full Risk Disclosure, Terms of Business, and Privacy Policy. 
We use cookies to support features like login and allow trusted media partners to analyze aggregated site usage. Keep cookies enabled to enjoy the full site experience. By browsing our site with cookies enabled, you are agreeing to their use. Review our cookie information for more details.
This website (trivehub.com) belongs to Trive International, and it is the registered trademark of Trive International Ltd. Trive International Ltd. is authorized and regulated by the British Virgin Islands’ financial authority, named Financial Services Commission (“FSC BVI"), under the company number 1728826 and license number BVI SIBA/L/14/1066.

© 2024 Trivehub

Trivehub is operated by Trive International. The information on this site is for informational purposes only and does not constitute investment advice.