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Investing.com – Next week’s economic calendar is on the light side, but rate decisions in Canada and Australia will be in the spotlight ahead of the Federal Reserve’s expected June 14 announcement. Investors remain cautious despite the rally in tech stocks and market watchers will be updated on the outlook for the global economy. Here are the events to follow this week.
- Give the USA
With the Fed entering its traditional blackout period ahead of its June 13-14 meeting, there will be no statements on the monetary policy outlook.
Friday showed an acceleration in job growth in May but also indicated that wage gains are moderating. The rise in the unemployment rate has reinforced the view that labor market conditions are easing.
The jobs data bolstered expectations that the Fed might halt jobs at its next meeting. This would be the first stop since the Fed began its aggressive anti-inflation tightening more than a year ago.
The index is due out on Monday and is expected to show a still solid rate of expansion, in contrast to the report which contracted for the seventh consecutive month in May.
Other expected data are on Wednesday and on Thursday.
- Stock market earnings
Some investors are increasingly concerned about how market gains are dominated by the performance of a small handful of large-cap stocks, while the rest of the market struggles.
The index has gained 33% so far in 2023, while the is up 11.5% year over year and currently sits at a 10-month high.
The combined weight of five stocks – Apple (NASDAQ:), Microsoft (NASDAQ:), Alphabet (NASDAQ:), Amazon (NASDAQ:) and Nvidia (NASDAQ:) – now represents 25% of the market value of the S&P 500, and the buzz around artificial intelligence advances fuels hopes of significant future gains.
A rally concentrated in a handful of stocks raises questions about the health of the broader market and risks triggering volatility if investors turn away from mega-cap companies.
- Central bank decisions
Ahead of the upcoming Fed meeting, policy meetings of and the Bank of Canada will be held this week, whose officials are grappling with ainflation still persistent.
Tuesday’s RBA decision could go one way or the other after April inflation data rose much more than expected.
Rates are already at an 11-year high after last month’s surprise hike, and RBA Governor Philip Lowe said he wanted to send a clear message: the central bank will do whatever it takes to win the fight against inflation.
Meanwhile, markets are expecting him to give it a hawkish grip, indicating he may hike rates again in July unless there is evidence of cooling inflation.
- Euro zone
In the euro zone, data on Monday will show the German economy performing at the start of the second quarter, with data on , , and , after it emerged last week that the bloc’s largest economy slipped into recession in the first quarter.
The European Central Bank is to publish the results of its Consumer Expectations Survey on Tuesday, which will show whether inflation expectations are consolidating.
ECB President Christine Lagarde will testify before the European Parliament’s Committee on Economic and Monetary Affairs on Monday and her comments will be closely monitored.
Other ECB officials due to speak before the central bank enters its lull ahead of its June 15 meeting on Thursday include governing council members Luis de Guindos and Fabio Panetta.
- World Bank and OECD Global Economic Forecasts
Investors will be updated on the outlook for the global economy when the World Bank releases its latest global growth projections on Tuesday, followed by the OECD a day later with its forecast.
The World Bank last month warned of a sluggish growth crisis in the global economy that could persist into the next decade amid financial sector turmoil, high inflation, the effects of Russia’s invasion of Ukraine and three years of COVID -19.
Meanwhile, the OECD raised its forecast for global growth as early as March, saying it expects global growth to reach 2.6% this year and 2.9% in 2024, but warned prospects remain fragile and risks remain to the downside.
- Article produced with the contribution of Reuters