The week ahead: Fed, BoE and BoJ meetings, UK and US inflation data

calendarCentral banks will be this week’s protagonists with the US Federal Reserve’s decision on rates on everyone’s spotlight.

Fund Strategy looks at some key events shaping the week and what to expect.

Monday 13 June

  • Opec – Monthly oil market report

Monday will see the publication of the Opec monthly oil market report for June.

The report covers major issues affecting the world oil market and gives an outlook for crude oil market developments for the coming year.

The report gives some detailed analysis of what is affecting the oil market trends in terms of demand, supply as well as the oil market balance.

Tuesday 14 June

  • UK Consumer Price Indices from the ONS
    IHS Global Insight chief UK and European economist Howard Archer says UK consumer price inflation is expected to go back up to 0.4 per cent in May after dipping to 0.3 per cent in April from a 15-month high of 0.5 per cent in March.
    Archer says: “Inflation is expected to have risen modestly in May primarily due to higher petrol prices as a result of oil prices reaching 2016 highs during the month.
    “However, the upward impact of this will be limited by the fact that oil prices also firmed in May 2015. Sterling’s overall weakening over the early months of 2016 may also have had some upward impact on prices in May.
    “Consumer price inflation should trend gradually upwards over the coming months on the assumption that the UK ends up voting to stay in the EU in the 23 June referendum.”
  • Ted Baker full year results

Ted Baker has been “a fantastic stock”, says AJ Bell investment director Russ Mould, but the retail sector has seen a “substantial” fall recently. He says: “You need a strong brand, online presence and strong balance sheet.”

  • Crest Nicholson full year results

Following the latest Rics survey which forecast a drop of house prices for the first time since 2012, Mould says the FTSE250 company’s results might give a first suggestion the trend is in downward mode.

 Wednesday 15 June

  • US Federal Reserve meeting results

AXA Investment Managers chief investment officer for fixed income Chris Iggo says although commentators say the Fed will not raise rates in June, financial conditions are easier today than they were in December at the time of the last move.

He says: “Last week’s employment report for May put the skids under that view and it now seems that there is a strong chance that the Fed will pass in June.

“I can’t, for the life of me, believe that serious central bankers think a rate hike a month apart makes a huge difference to how the economy will operate over the next couple of years, but the view now seems to be that an increase in July could be seen.”

Mould says: “If they raise rates, the dollar will go up strongly but the US economy is not strong enough to cope with that.”

Meanwhile, Mould adds the Federal Reserve could raise or cut rates regardless of the looming general election. He says: “Washington is so inflamed at the moment so everyone will try to put a political angle on the Fed despite it remaining impartial.”

Thursday 16 June

  • Bank of Japan meeting on rates

The Bank of Japan announces its monetary policy which is more likely to be a rate cut, rather than an increase, Mould says.

  • US consumer prices data
  • Bank of England meeting

The Bank of England’s Monetary Policy Committee will meet to decide on interest rates.

Commentators don’t expect the central bank to move on rates largely due to the upcoming EU referendum.

Archer says: “Much attention will likely focus on what the Bank of England has to say on the outlook for the UK economy in the event of a UK vote to leave the EU.

“However, Governor Mark Carney has indicated that the Bank of England has said all that it is going to on the subject and that there is unlikely to be anything new of significance in the minutes of the June MPC meeting.

“Carney has vigorously defended the right and appropriateness of the Bank of England to highlight the risks to the UK economy over the forecast horizon that would come from a vote to leave the EU.

“Carney has argued that the bank would not be doing its job properly if it did not analyse what it regards as the major risk to UK financial stability and a major influence on the economic outlook over the forecast horizon.”

Friday 17 June

  • US Commerce Department to issue housing data
  • European Commission to issue EU foreign trade statistics
  • Federal Reserve – US industrial production figures