We are heading to a pivotal week in finance, with several key events likely to affect risky markets and crypto. While all eyes will be geared to this week’s FOMC meeting on June 17–18, we’ll also have other economic data that will help us assess the state of economies worldwide.
Monday
A relatively slow Monday in the economic sector, as the market reacts to the Israel–Iran conflict. Given Iran making up 4% of the worldwide oil production, the oil market is currently apprehensive of sudden price spikes. In the U.S., oil prices rose about 3% on Sunday night, reaching around $75% per barrel.
This is now especially significant because higher oil prices would ultimately trickle down into higher gas and energy costs for everyday Americans. With the Fed facing a hard-fought battle to achieve its 2% inflation target, this potential oil crisis would ultimately make Powell’s crew even more cautious in slashing interest rates.
Tuesday
On May 17, we’ll get to see how retail is doing in the United States. On this date, the retail sales data will help us gauge consumer strength in the U.S. amid ongoing economic uncertainty.
Retail sales in May are expected to show a 0.6% decrease according to forecasts, likely a correction due to April’s formidable 1.7% increase in sales. Moreover, “Core Retail sales”, which is the same data but excluding automobiles, are expected to see a 0.2% increase.
Wednesday
We’ll start the day with an update on British consumer prices in May. Only three hours after, Eurostat will also update us on how are consumer prices are holding up down in Europe.
Over in the U.S., this week’s crude oil inventories will be especially significant given the potential impact of rising oil prices we’ve mentioned earlier.
By the afternoon, the Fed will release its new interest rate decision. Despite facing tremendous pressure from President Trump, the Federal Open Market Committee, led by Fed Chair Jerome Powell, is unlikely to touch on rates right now.
The current rate of 4.50% has remained unchanged since December of last year, and will likely continue so for the foreseeable future. Despite Trump showing frustration about the Fed not changing rates in his administration so far, economic uncertainty, tariffs, a weak bond market, and now a Middle Eastern war are likely to keep the Fed from risk-taking.
Thursday
A day after, it will be the U.K.’s turn to decide its interest rate for the upcoming period. Much like the U.S., forecasts predict that the Bank of England will keep rates steady at 4.25%, as policymakers weigh inflation risks against economic growth concerns.
We’ll also take a look at how the job market is doing in the U.S. as the Department of Labor will release its weekly update on initial and continuing jobless claims.
Friday
Friday will bring the Philadelphia Fed Manufacturing Index, a key gauge of manufacturing activity in the Mid-Atlantic region. The index is forecasted at -1.2, improving from May’s -4.0 reading, signaling a potential stabilization in the sector.
While still in negative territory, this slight recovery suggests manufacturers are seeing less contraction compared to previous months, likely due to less uncertainty revolving around tariffs in international trade.
More than likely, this week will have several events that could shape investor’s sentiment and market prices in stock and crypto. Stay tuned to the news as we’ll cover these topics daily this week!
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