According to ChainCatcher, market attention next week will center on interest-rate decisions and policy communications from several major central banks, led by the Federal Reserve. Warsh has remained silent since being sworn in as the new Fed chair, and the press conference following the June rate decision is set to become a key venue for testing his monetary-policy stance. Markets are also waiting for a clear signal from him on reforms to the Fed’s communication framework.
Key central bank events and U.S. data in Beijing time
The first major item on the calendar comes on Monday at 15:15, when European Central Bank President Christine Lagarde is scheduled to speak. On Tuesday, the Bank of Japan will announce its interest-rate decision, with the exact time still listed as to be determined. At 14:30 on the same day, BOJ Deputy Governor Shinichi Uchida will hold a monetary-policy press conference.
Also on Tuesday, at 20:15 Beijing time, the United States will release the weekly change in ADP employment for the week ending May 30. The focus then shifts to the Federal Reserve early Thursday. At 2:00, the Federal Open Market Committee will release its interest-rate decision and Summary of Economic Projections. At 2:30, Fed Chair Warsh will hold a monetary-policy press conference.
Later on Thursday, at 20:30 Beijing time, the United States will publish initial jobless claims for the week ending June 13, along with the June Philadelphia Fed Manufacturing Index. These data points are included in the same week of policy-heavy events, adding to the importance of the Fed’s policy statement, projections and press conference.
Three hawkish signals under scrutiny
On policy signals, the market will watch whether three hawkish elements from the Fed materialize. The first is whether the original statement’s wording that the “next step tends toward a rate cut” will be removed. If that phrase is deleted, the source says it would mean the Fed has formally ended its previous easing bias and shifted toward a policy stance centered on fighting inflation.
The second focus is the dot plot. The March dot plot showed one rate cut remaining for the year, but the source states that the new dot plot will most likely shift toward showing stable rates, and it also refers to a scenario in which a majority of officials expect rate hikes. The third focus is the balance of risks: if officials’ concern about inflation rises clearly while concern about the labor market fades, that would set the stage for subsequent rate increases.
The week also includes a U.S. market holiday. On Friday, June 19, the New York Stock Exchange will be closed for Juneteenth. CME Group futures contracts covering precious metals, energy, foreign exchange, equity indexes and U.S. Treasuries will end trading early at 01:00 Beijing time on June 20. Brent crude futures contracts on the Intercontinental Exchange platform will close early at 01:30 Beijing time on June 20.