US PCE inflation data on Friday has boosted bets the Fed can cut in September. Markets will focus on US jobs data this week. Today’s Tankan survey will give clues on whether the Bank of Japan can hike again in July.
In our bonus deep dive interview, ANZ Senior Economist Catherine Birch explains why ANZ has lifted its Q2 forecast for Australian inflation.
5 things to know:
US inflation data on Friday boosted hopes that the Federal Reserve can start cutting rates from September. The Fed’s preferred PCE inflation measure was flat in May. ANZ Head of G3 Economics Brian Martin says the 2.6% rise in annual core PCE was the lowest since March 2021.
Brian says the FOMC will be watching for continued softening in price and jobs data over the next two months.
That begins with raft of US June jobs and wages data this week. ANZ Senior Rates Strategist Jack Chambers says the FOMC will be looking for further signs of strain in the jobs market.
Japan’s Tankan business survey is being watched closely today for what it might signal to the Bank of Japan about economic activity. Jack says an improvement will lift confidence that the BoJ can hike rates again in July to bolster the Yen.
Jack says European CPI figures later this week will be important for the speed at which the European Central Bank can continue its easing cycle.
Cheers
Bernard
PS: Catch you tomorrow with a look at what to expect in the RBA’s June board meeting minutes.
