Forecasting the Coming Week: The Fed and US CPI gather all the attention

The robust prints from US Nonfarm Payrolls for the month of May helped the Greenback end the week with a humble advance against the backdrop of alternating trends of rate-cut bets by the Fed, all ahead of the release of key US inflation data and the FOMC event.

The US Dollar managed to bounce off earlier two-month lows in the 104.00 neighbourhood in response to strong NFP results, the jump in US yields across the curve, as well as further repricing of rate cuts in Q4. The following week will see the publication of the US Inflation Rate on June 12, along with the FOMC gathering and the usual press conference by Chair J. Powell. On June 13, Producer Prices are due along with weekly Initial Jobless Claims. The advanced Michigan Consumer Sentiment gauge is only due on June 14.

Despite the move to the area beyond 1.0900 the figure, EUR/USD ended the week on the back foot, extending at the same time its consolidative bias in place since mid-May. The Sentix Index is due on June 12. Later, final Inflation Rate in Germany is expected on June 12, while Industrial Production in the broader Euroland comes on June 13. The EMU’s Balance of Trade will close the weekly docket on June 14.

Another failure to break above the 1.2800 barrier in a sustainable fashion left GBP/USD with marginal losses on the weekly chart. The UK labour market report will be unveiled on June 11. Next on tap will be the GDP figures, Balance of Trade, Construction Output, Industrial and Manufacturing Production, all due on June 12.

In spite of the sharp post-NFP U-turn, USD/JPY ended the week with a modest retracement near the 157.00 region, reversing two consecutive weeks of gains. The final Q1 GDP Growth Annualized is due on June 10, along with Bank Lending figures and the Eco Watchers Survey. Producer Prices in Japan come on June 12, seconded by the BSI Large Manufacturing gauge and the usual weekly Foreign Bond Investment figures on June 13. On June 14, the BoJ will decide on its interest rates, seconded by the Tertiary Industry Index and final Industrial Production results.

AUD/USD collapsed to multi-session lows in response to the change of heart around the Greenback on Friday, leaving the Aussie dollar with modest losses on a monthly basis. The release of the Australian labour market report takes centre stage on June 13, seconded by the Consumer Confidence Index tracked by Westpac. On June 14, Consumer Inflation Expectations will be released.

Anticipating Economic Perspectives: Voices on the Horizon

• ECB’s Nagel will speak on June 10
• BoC’s Macklem and ECB’s Nagel.
• Fed’s J. Williams, and BoC’s Kozicky speak on June 13
• Fed’s A. Goolsbee and ECB’s Lagarde are due to speak on June 14

Central Banks: Upcoming Meetings to Shape Monetary Policies

• The Fed is expected to keep rates unchanged on June 12.
• The BoT will decide on rates on June 12.
• The BoJ meets on June 14.