What to Watch - Week of 23 June 2025

Past Week

• Geopolitical tensions have buffeted markets, but so far markets are viewing the Israel/Iran conflict as not spilling over to a broader regional engagement. Of course, that remains to be seen
• The FOMC came and went without much fanfare, the median 2025 dot stayed at two rate cuts for 2025. The SNB cut rates to zero, while the Norges Bank surprised with a cut, and the Riksbank with dovish guidance
• In Australia, the unemployment rate for May stayed at 4.1%. Such stability suggests little rationale to cut rates below neutral which we see at 3.10%

Week ahead

• In Australia, the Monthly CPI Indicator (Wednesday) and Job Vacancies (Thursday) headline. For the CPI Indicator, it is the mid-quarter month and thus has greater coverage of services. We pencil in a 2.2% y/y read
• Globally, geopolitics dominates. US President Trump is contemplating whether to involve the US in the Israel/Iran conflict. NATO Heads of State are also meeting (Tuesday), focus on defence spending target of 5% of GDP
• On the global data calendar, it is Global PMIs (Monday) with focus again on levels of activity and relativities (is US economic exceptionalism fading or being sustained?)
• US Fed Chair Powell has congressional testimony (House Tuesday, Senate Wednesday). PCE (Friday) is the pick of the data, not for inflation but for spending. Also of interest will be Jobless Claims (Thursday)
• In Europe it is quiet. ECB Chief Economist Lane is speaking (Tuesday) and the German IFO is also out. The UK sees BoE Governor Bailey before the House of Lords
• In China, Industrial Production (Friday) is the only notable data piece. The Standing Committee on the 14th National People’s Congress is also meeting (Tuesday to Friday)
• Japan has the Tokyo CPI (Friday) along with the BoJ Minutes (Wednesday). In NZ it is mostly quiet

View the full report here 

Chart 1: US continues to surprise to the downside

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