The week ahead: US CPI report, FOMC projections and press conference

Euro zone industrial production figures will attract investor interest on Thursday. A recovery in production would correspond to expectations of an improvement in the macroeconomic environment.

On Friday, investors are also expected to take into account German wholesale figures, French inflation figures and Eurozone trade data.

A less pronounced drop in wholesale prices and an upward revision of French CPI figures could have a greater impact on EUR/USD.

The pound

The UK Labor Market Overview report on Tuesday will put investors’ focus on the pound and the Bank of England. Lower wage growth figures and higher unemployment could justify multiple rate cuts from the Bank of England in 2024.

Wednesday’s monthly GDP report is also worth looking at. A pick-up in economic activity could thwart growing bets on multiple BoE rate cuts in 2024.

Beyond the numbers, investors should monitor comments from the Bank of England. Views on inflation, the economic outlook and the BoE’s interest rate developments could shake things up.

The loon

Building permit figures for April could influence buyers’ appetite for the loonie. Housing contributes less than 10% to the Canadian economy. However, deteriorating housing market conditions could affect consumer confidence/spending and demand-driven inflation.

More moderate inflation forecasts could support further interest rate cuts from the Bank of Canada.

Investors should also consider speeches from the Bank of Canada, with Governor Macklem and Deputy Governor Kozicki scheduled to speak on Thursday. Opinions on the BoC’s interest rate trajectory will attract investor interest.

The Australian dollar

On Tuesday, Australian business confidence figures could influence buyers’ appetite for the Australian dollar. A weakening of business confidence would reflect a deterioration in the macroeconomic environment and a reduction in spending. Cost-cutting measures could have an impact on the Australian labor market.

Australian consumer confidence and labor market data will attract investors’ attention on Thursday. A continued decline in consumer confidence could signal a decline in consumer spending. Downward trends in consumer spending could dampen demand-driven inflation and increase bets on an RBA rate cut.

However, labor market conditions and wage growth trends are crucial. A larger-than-expected fall in Australia’s unemployment rate could dampen investors’ bets on an RBA rate cut in 2024.

Friday’s consumer inflation expectations figures should also be taken into account. Inflation remains a problem for the RBA. Expectations of a higher inflation rate could signal a more hawkish rate path from the RBA and boost buyer demand for the Australian dollar.

The kiwi dollar

On Thursday, e-card retail sales will influence buyers’ appetite for the NZD/USD pair. A further decline in retail e-card sales could signal a more subdued inflation outlook and allow for a more dovish path for RBNZ rates.

Corporate PMI numbers will also need to be considered on Friday as investors assess the macroeconomic environment.

The Japanese yen

On Monday, Japan’s final GDP figures will show…

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