Giles Coghlan LLB, Lth, MA
Financial Source
Looking at the week ahead, we have several promising opportunities:
Monday starts quiet with the Chinese Loan Prime Rate announcement. While not a direct trading opportunity, any unexpected changes could influence global market sentiment, particularly in boosting risk assets like stocks.
Tuesday brings us the Canadian CPI print, a significant event given recent statements from the Bank of Canada. Governor Macklem has emphasised the need for clear signs that inflation is sustainably falling before considering rate cuts. Currently, markets see a 44% chance of a rate cut at the June 5th meeting. A lower-than-expected inflation figure could trigger heavy selling of the CAD, while a higher print might strengthen it.
Wednesday features the RBNZ interest rate decision. Although no change is expected, the recent inflation data from New Zealand was firmer than anticipated, which could pressure the RBNZ to maintain or even increase rates, potentially strengthening the NZD.
Thursday and the remainder of the week focus on a slew of data including UK and Eurozone flash PMIs, and Japanese inflation data. The UK CPI data on Tuesday will be particularly pivotal. With inflation expected to drop, any figures significantly below expectations could reinforce the Bank of England's dovish stance and lead to GBP selling.
For the Eurozone, a strong PMI print could lift the EUR, especially against the GBP if UK data disappoints. Meanwhile, Japan's inflation data on Friday could impact JPY movements, especially if the figures put additional pressure on the Bank of Japan to adjust interest rates.
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