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Here is a summary of the most important interest rate decisions and economic data released during the week:
Interest rates:
- Bank of Japan (BOJ) – Tuesday, June 17
- Decision: Keep interest rates below 0.50%
- Impact: Continued accommodative monetary policy despite limited inflationary pressures.
- US Federal Reserve (FOMC) – Wednesday, June 18
- Decision: Maintain interest rate at 4.50%
- Expectations: Consistent with previous expectations, indicating that the market is anticipating upcoming data before making a downward decision.
- Swiss National Bank (SNB) – Thursday, June 19
- Decision: Reducing interest to 0.00% from 0.25%
- Implication: The Swiss are moving towards easing monetary policy, perhaps due to weak growth or pressure on the Swiss franc.
- Bank of England (BOE) – Thursday, June 19
- Decision: Keep the interest rate at 4.25%
- Voting: 3 in favor of the cut, 6 in favor of the continuation, indicating an internal division and a growing tendency toward the cut later.
Important economic data:
US:
- Core Retail Sales:
- Result: -0.3% (0.2% worse than expected)
- General retail sales:
- Result: -0.9% (worse than expected -0.5%)
- Unemployment claims:
- Result: 245,000 (slightly below expectations of 246,000)
- Indication: Continued slowdown in consumer momentum, with a firm labor market.
UK:
- Annual Consumer Price Index (CPI):
- Result: 3.4% (slightly better than expected 3.3%)
- Implication: Inflation is gradually declining, strengthening the case for a rate cut in the near future.
New Zealand:
- Gross Domestic Product (GDP q/q):
- Result: 0.8% (better than expected 0.7%)
- Implication: A clear economic improvement, which may prompt the central bank to postpone any interest rate cut.
Australia:
- Employment change:
- Result: -2.5 thousand jobs (significant drop compared to expectations of 20.6 thousand)
- Unemployment rate:
- Result: 4.1% (matches expectations)
- Indication: Weak job growth but stable unemployment rate.
Summary and conclusions:
- The Swiss National Bank was the only one to cut interest rates this week , while the Federal Reserve and the Bank of England opted to hold rates temporarily pending further economic indicators.
- US data points to a slowdown in consumption as the labor market remains firm.
- Continued low inflation in Britain could pave the way for an imminent interest rate cut.
- New Zealand’s economic performance was relatively positive, while Australia saw a surprising decline in employment.
