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What to watch - Week of 10 June

In a holiday shortened trading week, all eyes are fixed on Thursday’s jobs data. NAB expects a fallback in the May unemployment rate to 4% from 4.1%. In the US, the FOMC meeting and core CPI data on Wednesday highlight the week. Around the globe, the Bank of Japan (BOJ) meets Friday, and its quiet in Europe with focus on the outcomes of the European Parliamentary elections.

Taylor Nugent | Markets Research 

Past Week

  • A big week offshore with interest rate cuts by the BoC and ECB. However, inflation data will have to play ball for further cuts to be delivered
  • Yields took their direction from softer US employment indicators (ahead of payrolls tonight) with the US 10yr yield falling 20bps to 4.30%
  • Australian macro data was not overly market moving. Q1 GDP printed close to expectations at 0.1% q/q vs. 0.2% consensus, and was 1.1% y/y

Comment

  • We give a sneak peek at some preliminary findings on the return to office, which suggest office attendance appears to be stalling at 75% of pre-Covid
  • Sydney train station data suggests that while usage improved at inner city stations through 2023, progress has stalled in the past six months

Week ahead

  • It’s a holiday Monday for most of Australia (excl. WA & QLD), Followed by labour market data (Thursday) and the NAB Business Survey (Tuesday)
  • NAB pencils in a fallback in the May unemployment rate to 4.0% from 4.1%.
  • In the US, the FOMC (Wednesday) and US Core CPI (Wednesday) take centre stage. PPI (Thursday) fills out read-through to the Fed’s preferred PCE.
  • Out of the FOMC we expect the median 2024 dots to be pared to 2 cuts. Consensus for Core CPI is 0.3% m/m. Ahead of payrolls tonight, markets are more than 80% priced for a cut in September.
  • The BoJ meets Friday, where a majority of analysts look for a reduction in bond purchases. The messaging will be watched for whether it tees up a July hike.
  • A quiet week for data in Europe, though ECB speakers are in focus, along with the outcomes of European Parliamentary elections. Watch for an EU decision on tariffs on Chinese EVs.
  • In the UK labour market data including weekly earnings is Tuesday
  • Chinese aggregate financing data is due by 15 June and CPI is Wednesday. 

View the full report here

Also in the What to Watch

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NAB Markets Research

Our markets team is keeping clients informed with award-winning in-depth analysis on the Australian economy, foreign currency, fixed income, credit and commodities markets.