On Tuesday, the focus in Australia will be on the RBA monetary policy announcement. In the U.K., traders will be monitoring the claimant count change, the average earnings index 3m/y and the unemployment rate. Meanwhile, Canada will release its inflation data.
On Thursday, Australia will report its employment change data and the unemployment rate, while the U.S. will release unemployment claims.
Throughout the week, some FOMC members are expected to deliver remarks.
In Canada, the consensus for CPI m/m is 0.0% vs. the prior -0.4%. The median CPI y/y is expected to remain unchanged at 2.4%, while the trimmed CPI y/y is projected to rise to 2.6% from the previous 2.5%. The common CPI y/y is likely to stay steady at 2.0%.
Core inflation, however, remains sticky, but overall inflation trends are expected to decline. The BoC will closely monitor this week's data, along with labor market conditions, which have begun to stabilize, and wage growth, which is set to moderate. The Bank is expected to continue cutting rates throughout the year.
Analysts also noted that the moderation in wage inflation is broad-based across key wage-setting mechanisms. Enterprise bargaining contributions declined to 0.46 ppt from 0.66 ppt, individual arrangements softened to 0.59 ppt from 0.74 ppt, and awards/minimum wage contributions fell to 0.36 ppt from 0.63 ppt. This broad deceleration underscores the increasing sensitivity of wage growth to softer labor market conditions, suggesting downside risks to the 0.8% forecast.
The RBNZ projects that the medium-term inflation outlook will likely remain anchored near 2.0%. However, near-term CPI forecasts may edge higher due to a weaker trade-weighted index (TWI) and elevated commodity prices, according to analysts at Westpac.
In Australia, the consensus for employment change is 19.7K, down from the prior 56.3K, while the unemployment rate is expected to rise from 4.0% to 4.1%.
The economic outlook for the eurozone is not very promising, and the ECB is likely to continue with rate cuts throughout the year. A modest improvement is expected in this week's PMI prints, with the consensus for manufacturing PMI at 47.0 and services PMI rising to 51.5, but Wells Fargo analysts point out that manufacturing has been in contraction territory since mid-2022 and the services index remains low compared to historical standards.
This article was written by Gina Constantin at www.forexlive.com. Read More Details
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