On Thursday morning, the Swiss National Bank cut interest rates from 1.5 per cent to 1.25 per cent. The outcome of yesterday's meeting was uncertain and highly emotional. The cut was predicted by almost half of the participants in a Bloomberg survey and discounted by financial markets by more than 65 per cent. Following the news of the cut, the franc, which has been the strongest of the major currencies in recent weeks, weakened by around 0.5 per cent. As a result, the CHF/PLN exchange rate fell below 4.55. The Bank of England decided to keep interest rates on hold at peak levels, despite the success of the 2 percent inflation target and zero economic growth. As a result, the GBP/PLN exchange rate has risen 2.3 per cent since the start of the month to 5.13. In the coming week, we will learn the final GDP figures for the US and the UK, both of which have recently experienced economic slowdowns. We will conclude the week with PCE inflation readings in the US, which has stalled before reaching the Fed's inflation target.
Table of contents:
- US gross domestic product (GDP), quarterly (Q1).
- UK gross domestic product (GDP), annual (Q1).
- US consumer price index (PCE), year-on-year (May)
Thursday, 27.06, 14:30 CET, US gross domestic product (GDP), quarterly (Q1).
Preliminary data show that GDP growth slowed to 1.3 per cent in the first quarter of 2024, compared to 3.4 per cent in the fourth quarter of 2023. Consumer spending slowed more sharply than expected and private inventories subtracted more from growth. Non-residential investment, including structures and intellectual property, was revised upwards. Equipment investment grew less than expected, but residential investment exceeded expectations. Government spending and exports and imports also increased.
The current analyst forecast is for GDP growth to remain at 1.3 per cent.
Source: Tradingeconomics.com
A higher-than-expected reading could have a bullish impact on the USD, while a lower-than-expected reading could be bearish for the USD.
Impact: EUR/USD, USD/PLN, US500
Friday, 28.06, 8:00 CET, UK gross domestic product (GDP), annual (Q1).
The UK continues to grapple with a freeze in economic growth, with first estimates putting it at just 0.2 per cent year-on-year in Q1 2024, rebounding from a 0.2 per cent decline and beating forecasts. The services sector grew by 0.3 per cent, manufacturing by 0.5 per cent, but the construction industry fell by 0.7 per cent. Despite rising government spending, which increased by 3.7 per cent, household consumption, business investment, exports and imports all declined.
The current analyst forecast is for the GDP slowdown to continue at 0.2 per cent.
Source: Tradingeconomics.com
A higher-than-expected reading could have a bullish impact on the GBP, while a lower-than-expected reading could be bearish for the GBP.
Impact: GBP/USD, EUR/GBP, GBP/PLN
Friday, 28.06, 14:30 CET, US consumer price index (PCE), year-on-year (May)
The PCE price index rose by 2.7 per cent year-on-year in April, still remaining above the 2 per cent target. It can be said that we are now in a kind of inflationary stalemate, as all inflation indicators have stopped at January levels.
The current analyst forecast is for PCE inflation to remain at 2.7 per cent year-on-year.
Source: Tradingeconomics.com
Higher-than-expected inflation could be bullish for the USD, while a lower-than-expected interest rate could act bearishly on the USD.
Impact: EUR/USD, USD/PLN
Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)
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