Macroeconomics: The Day Ahead for 17 June

  • Modest schedule of data and events to end tempestuous week: ‘triple  witching’ in focus, as resolutely dovish BoJ and Singapore Exports are  digested; final Eurozone CPI, US Industrial Production and sprinkling of  BoE speakers
  • US Industrial Production: moderate expansion expected, but manufacturing  hours and Philly Fed 6-month outlook imply downside risks
  • ECB’s Visco BTP/Bund spread target comments playing with fire in a market  gorging on rate hike mania

EVENTS PREVIEW

A tempestuous week in markets ends with something of a whimper in terms of data and events, which will allow some time to take stock of the SNB shock, the Fed’s outright hawkishness, the BoE’s slightly more hawkish tone and the ECB’s rather messy policy making. In terms of the ECB, Lagarde may come to regret (or is perhaps already regretting) Visco putting some hard targets for the 10yr Bund/BTP spread yesterday, given that it is basically a red rag for markets gorging on rate hike mania. There are the no change and resolutely dovish BoJ policy decision and a solid set of Singapore Exports to digest. Ahead lie final Eurozone CPI, US Industrial Production and Canadian PPI, with speeches by BoE’s Pill and Tenreyro and an EU Finance Ministers meeting, which will amongst other things deciding on whether to release EU Recovery Plan funds to Poland, given that ‘rule of law’ disputes (with Poland) have largely been resolved. US Industrial Production and Manufacturing Output are forecast to post moderate gains (0.4% and 0.3% m/m), but with the labour report showing manufacturing hours falling 0.1%, with a sharper fall in the auto sector, and with the Philadelphia Fed 6-mth outlook falling into negative territory for the first time since 2008, the risks look to be skewed to the downside of the consensus. Today is also “triple witching” in equity markets.

Next week’s data schedule is dominated by surveys (PMIs, Ifo, CBI, regional Fed) with the UK looking to CPI and Retail Sales, and while there are no major central bank meetings, there will also be a deluge of central bank speakers, including Powell’s semi-annual testimony to Congress.

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ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2021 ADM Investor Services International Limited.

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