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What to Watch - Week of 17 June 2024

Central banks are the name of the game this week, with all eyes on the RBA tomorrow. NAB expects rates to remain on hold with little change to the “not ruling anything in or out” bias. Around the globe the BoE, SNB and Norges all meet Thursday. The US is quiet ahead of the Juneteenth Public Holiday, though markets will be watching retail sales, jobless claims and a raft of Fed speak.
NAB Markets Research
17 June 2024
Created by potrace 1.15, written by Peter Selinger 2001-2017 3 min read

Taylor Nugent | Markets Research

Past Week

  • The US event whipsawed markets
  • Payrolls were strong, CPI and PPI were much more benign than we have seen for a while, but the FOMC median projection had only 1 cut in 2024.
  • All said and done we are back to where we were pre-payrolls, with 49bp of cuts priced for 2024 and a US 2yr yields around 4.72%
  • Elsewhere, the Euro underperformed and French spreads to Germany widened to the highest in 7 years as markets digested political risk

Comment

  • Employment growth in May was strong, including on a trend basis, in both Australia and the US
  • But raw employment gains are a poor indicator of labour market tightening or loosening. Unemployment rates still suggest gradual cooling.
  • In the US, there is an extra disconnect between the household and establishment surveys.

Week ahead

  • RBA the focal point domestically in what is a quiet week for data. We expect the RBA to be on hold with little change to “not ruling anything in or out”
  • Offshore, three other G10 central banks meet. BoE, SNB and Norges all meet Thursday. BoE to be on hold as is Norges, but for the SNB markets are 56% priced for a cut
  • China has monthly activity data (Monday) and some speculation of a cut to the 1yr lending rate – though consensus is for no change
  • US is very quiet with the Juneteenth Public Holiday (Wednesday) which will see equity, bonds, and most US commodity markets closed
  • US retail sales (Tuesday) main data point to see whether it rebounds after a soft April. Jobless claims (Thursday) also worth a look. Fed speak too
  • Global PMIs (Friday) round out the week. These are more market-sensitive in Europe, though are starting to garner more attention in the US
  • European politics also will be closely watched ahead of upcoming elections: UK 4 July; French parliamentary 30 June and July

View the full report here

Also in the What to Watch

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All prices and analysis at 14 June 2024.  This information has been prepared by National Australia Bank Limited ABN 12 004 044 937 AFSL 230686 ("NAB"). The content is distributed by WealthHub Securities Limited (WSL) (ABN 83 089 718 249)(AFSL No. 230704). WSL is a Market Participant under the ASIC Market Integrity Rules and a wholly owned subsidiary of National Australia Bank Limited (ABN 12 004 044 937)(AFSL No. 230686) (NAB). NAB doesn’t guarantee its subsidiaries’ obligations or performance, or the products or services its subsidiaries offer.  This material is intended to provide general advice only. It has been prepared without having regard to or taking into account any particular investor’s objectives, financial situation and/or needs. All investors should therefore consider the appropriateness of the advice, in light of their own objectives, financial situation and/or needs, before acting on the advice.  Past performance is not a reliable indicator of future performance.  Any comments, suggestions or views presented do not reflect the views of WSL and/or NAB.  Subject to any terms implied by law and which cannot be excluded, neither WSL nor NAB shall be liable for any errors, omissions, defects or misrepresentations in the information or general advice including any third party sourced data (including by reasons of negligence, negligent misstatement or otherwise) or for any loss or damage (whether direct or indirect) suffered by persons who use or rely on the general advice or information. If any law prohibits the exclusion of such liability, WSL and NAB limit its liability to the re-supply of the information, provided that such limitation is permitted by law and is fair and reasonable. For more information, please click here.

 

The content is distributed by WealthHub Securities Limited (WSL) (ABN 83 089 718 249)(AFSL No. 230704). WSL is a Market Participant under the ASIC Market Integrity Rules and a wholly owned subsidiary of National Australia Bank Limited (ABN 12 004 044 937)(AFSL No. 230686) (NAB). NAB doesn’t guarantee its subsidiaries’ obligations or performance, or the products or services its subsidiaries offer.  This material is intended to provide general advice only. It has been prepared without having regard to or taking into account any particular investor’s objectives, financial situation and/or needs. All investors should therefore consider the appropriateness of the advice, in light of their own objectives, financial situation and/or needs, before acting on the advice.  Past performance is not a reliable indicator of future performance.  Any comments, suggestions or views presented do not reflect the views of WSL and/or NAB.  Subject to any terms implied by law and which cannot be excluded, neither WSL nor NAB shall be liable for any errors, omissions, defects or misrepresentations in the information or general advice including any third party sourced data (including by reasons of negligence, negligent misstatement or otherwise) or for any loss or damage (whether direct or indirect) suffered by persons who use or rely on the general advice or information. If any law prohibits the exclusion of such liability, WSL and NAB limit its liability to the re-supply of the information, provided that such limitation is permitted by law and is fair and reasonable. For more information, please click here

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