Uncertainty Looms? Data To Illuminate US Inflation Path

Wednesday, 10 July 2024, 04:00 – RBNZ Interest Rate Decision

In May, the Reserve Bank of New Zealand (RBNZ) decided to maintain the Official Cash Rate (OCR) at 5.50%. This decision reflects a commitment to keeping monetary policy restrictive to manage inflationary pressures and ensure that inflation returns to the target range of 1-3% by the end of 2024. Given the current economic conditions and the RBNZ’s focus on reducing inflation, it is likely that the RBNZ will maintain a restrictive monetary policy stance and will likely maintain the interest rate at its current level in the near term.

Thursday, 11 July 2024, 08:00 – UK GDP (MoM) (May)

The latest UK GDP data (MoM) for April 2024 showed that the economy remained flat at 0.0%, following a 0.4% increase in March 2024. This stagnation is attributed to declines in industrial output and construction, which offset growth in the services sector. The manufacturing sector, particularly pharmaceuticals and food products, faced significant challenges, while the services sector showed modest growth. Given the current economic conditions, the outlook for next GDP release will be expected to remain cautious given the continued challenges in the manufacturing and construction sectors might constrain overall economic growth.

Thursday, 11 July 2024, 14:30 – US CPI (YoY) (Jun)

In May, the US Consumer Price Index (CPI) for year-over-year stands at 3.3%, marginally below the forecast and last month’s figure of 3.4%. This consistent CPI suggests that inflationary pressures have been relatively controlled, likely due to factors like stabilizing energy prices, food costs, and housing expenses. Given the recent trend, the outlook is for inflation to gradually decrease, slowly returning to the Federal Reserve’s target of 2%.

Friday, 12 July 2024, 14:30 – U.S PPI (MoM) (Jun)

The latest U.S. Producer Price Index (PPI) data for May 2024 showed a decrease of -0.2% month-over-month, which was below the forecasted reading of 0.1%. This decline was primarily driven by a significant drop in goods prices, which fell by 0.8%, while service prices remained unchanged. The overall decrease suggests lower input costs for producers, potentially due to reduced demand or lower costs for raw materials and energy. Considering the recent trend of fluctuating figures and ongoing economic uncertainties, upcoming data is likely to continue reflecting weakness.