US inflation data awaited: if the decline were confirmed, expectations of a pause in Fed hikes would strengthen
2′ of reading
The Tokyo Stock Exchange takes its cue from the consolidation of US stock indexes and starts trading higher, with investors waiting for more information from the meetings of the US Federal Reserve and the Bank of Japan (Boj) scheduled for this week. At the opening, the Nikkei reference index advanced by 0.75% to 32,676.53, with a gain of 242 points. In foreign exchange trading, the yen lost ground against the dollar at 139.40, and at 150.10 against the euro. The Chinese stock exchanges open the session with little movement, below parity: the Shanghai Composite index drops 0.04% in the very first moments, to 3,227.49 points, while that of Shenzhen drops 0.03%, slipping to 2,020 ,52. Hong Kong returns to trade with a slowdown: the Hang Seng index marks a drop of 0.44% to 19,318.93 points in the first few minutes of trading.
Today comes the appetizer. The one that opens the week of central banks: in the afternoon, at 2.30 pm Italian time, the May inflation data comes out from the United States. If (as estimated by economists) the cost of living were to slow down further, then hopes of a “softer” Fed would be strengthened. The market thinks (with a probability greater than 70%) that on Thursday, when the US central bank meets, a pause in the rate hike will be announced. Perhaps a short break, as the Fed may lift them for the last time in July, but a break nonetheless. But if today’s inflation reading comes out strong and above expectations, expectations could change. Thus begins the week of central banks.
Central Bank Week
The inflation data opens the week dominated by central banks. Wednesday, as mentioned, there will be the US Federal Reserve. And there’s a good chance he’s taking a break. The ECB arrives on Thursday, which should raise rates by 25 basis points. The Central Bank of China will also decide on Thursday and the Bank of Japan on Friday. Intense days, which could give volatility to the Stock Exchanges
Today’s events
In addition to US inflation, which is the real market mover of the day, other indicators are also arriving today. From Germany, the inflation (final data) for May, from Great Britain, the unemployment rate for April and the average wages again for April. After inflation (final data) from Spain, Istat data on the labor market for the first quarter of 2023 arrives from Italy. Then Germany publishes the ZEW index (economic sentiment). Eyes, finally, on the galaxy of Silvio Berlusconi listed on the Stock Exchange
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