On Tuesday, the U.K. will release the claimant count change, the average earnings index 3m/y, and the unemployment rate. In Canada, attention will turn to inflation data.
On Thursday, New Zealand will release its inflation data, while Australia will publish employment change and the unemployment rate. The eurozone will also be in focus with the European Central Bank’s monetary policy announcement.
In the U.K., the consensus for the claimant count change is 30.3K vs the prior 44.2K. The average earnings index 3m/y is expected at 5.7%, slightly below the previous 5.8%, while the unemployment rate is projected to remain unchanged at 4.4%.
The U.K. CPI y/y is only expected to drop from 2.8% to 2.7% and this is likely because of falling gas prices. However, services inflation is proving to be more stubborn.
ING analysts suggest that one of the main reasons for the strong retail sales data may be consumers making major purchases in advance of anticipated tariffs. They highlight a notable 10.6% m/m jump in auto volumes based on Wards data, along with increased credit card spending on appliances and electronics.
Inflation data for Canada will be released on Tuesday ahead of the BoC meeting. The consensus for CPI m/m is 0.7% vs. the prior 1.1%; median CPI y/y is expected to remain unchanged at 2.9%; trimmed CPI y/y is also forecast to hold steady at 2.9%, while common CPI y/y is likely to decline from 2.5% to 2.4%.
In New Zealand, the consensus for the CPI q/q is 0.7% vs. the prior 0.5%, with the annual rate expected at 2.3%. Westpac analysts attribute this to elevated food and fuel costs.
In Australia, the consensus for the employment change is 40.2K vs. -52.8K, and the unemployment rate is expected to rise slightly from 4.1% to 4.2%.
At this week's meeting, the ECB is widely expected to deliver a 25 bps rate cut to 2.25%. Recently, the Bank had a slightly less dovish tone as the economic situation in Germany and the broader eurozone shows signs of improvement. However, uncertainty surrounding tariffs is expected to add pressure in the near future.
Inflation data in the eurozone has shown continued progress, particularly in core and services inflation, supporting the case for rate cuts. Analysts expect additional 25 bps cuts at the June and September meetings, bringing the deposit rate down to 1.75% by the end of the year.
This article was written by Gina Constantin at www.forexlive.com. Read More Details
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