• All eyes on the Federal Reserve as it’s broadly expected to tighten policy again
  • UK inflation in the limelight before noon as GBP gets closes to its crucial support
  • US PPI along with DoE report should draw attention before the Fed decision

Today is all about the Federal Reserve meeting as the US central bank is widely expected to raise rates for the seventh time since 2015. On top of that it’s worth looking at UK CPI, US PPI as well as a weekly release on oil inventories prepared by the Energy Information Administration.

9:30 am BST – May UK inflation report: The pound has been already offered this week a bag of mixed readings. Prints regarding the industrial sector together with trade balance disappointed, but the labour market report (published yesterday) came to help irrespective of a bit slower wage growth. Given the pound keeps trading above an important demand area nearby 1.3340 one may say that today’s data might be especially noteworthy. The consensus indicates core CPI to stay at 2.1% while headline inflation is forecast to rise to 2.5% from 2.4%.

1:30 pm BST – US PPI: This month is a bit different as the CPI data was released before the PPI report lowering significance of the latter. Anyway, given a massive increase in oil prices it’s remarkably interesting how much it influenced US companies’ input costs. Notice that the recent sharp rally in oil prices could be outstandingly important for the future price growth momentum as it could morph into a broad-based pick-up of prices across many industries e.g. via rising transportation costs. Headline PPI is estimated to build to 2.8% from 2.6% whilst core PPI should stay unchanged at 2.3%.

3:30 pm BST – Oil inventories change by DoE: The yesterday’s API report was a bit of shock bringing a 0.9 million barrels increase for oil stocks. What’s more, gasoline stockpiles jumped meaningfully as well suggesting somewhat lacklustre demand for fuel even as a driving season is well underway. If the EIA confirms these numbers it would be a perfect reason to book recent gains from longs ahead of the next week OPEC/non-OPEC meeting. Crude stocks are forecast to fall by 1.1 million barrels while gasoline stockpiles ought to bump up 0.9 million barrels but the estimates might be skewed to the upside given the API release.

7:00 pm BST – Fed’s meeting: The Fed will hike rates for the seventh time since December 2015, but major focus will be on updated members’ projections with regard to the future fed funds rate. You can find our more clicking here.

Central bank speakers:

6:15 pm BST – BoE’s Kashyap

7:30 pm BST – Fed’s Powell (a post-meeting press conference)

link do file download linkWTI prices are struggling with a crucial trend line ahead of the DoE release. Source: xStation5