Next Week At A Glance – 10-14 Jun 2024

This story features ORIGIN ENERGY LIMITED, and other companies. For more info SHARE ANALYSIS: ORG

For a more comprehensive preview of next week's events, please refer to "The Monday Report", published each Monday morning. For all economic data release dates, ex-div dates and times and other relevant information, please refer to the FNArena Calendar.

By Danielle Ecuyer

Markets moved higher over the last week, with investors responding positively to lower bond yields, softer US economic data and at home a Q1 GDP reading of 0.1% quarter-on-quarter.

Depending on which expert you listened to, the reading was either better than anticipated or worse than expected. The bottom line, according to Barrenjoey, is a broadening in the slowdown in activity beyond households and into investment.

Consumers remain extremely cautious and are using savings for “special occasion spending” such as concerts, think Taylor Swift, or international travel.

RBA Governor Bullock, also spoke, and said the RBA “won’t hesitate to move and raise interest rates again” if inflation remains stronger than expected.

Markets barely flinched, suggesting traders took the comments as par for the course, and maybe we saw some home grown jawboning to keep consumers' cash in their wallets.

Bullock also said the RBA would look through the energy rebate as a one-off event, so all eyes will be focusing on how much or not spending arises from the upcoming tax cuts.

The week also marked the move by more central banks to initiate the rate cutting cycle. The Bank of Canada lowered the benchmark rate by -25bps, the first cut in four years, signalling more cuts are forthcoming.

In contrast the ECB delivered a ‘hawkish’ -25bps cut to 3.75%, the first since 2019. The cut was viewed as 'hawkish' as the ECB emphasised it is not pre-committing to a rate cutting pathway. The current monetary policy remains restrictive.

The European Central Bank also stressed it will stay restrictive as long as necessary to achieve the inflation target. Both the inflation and GDP forecasts were raised.

This all leads to next week’s FOMC meeting over Wednesday June 11 and Thursday June 12, coinciding with the May CPI print on Wednesday, and the May PPI print on Thursday.

MFS Investment Management highlights “another Fed meeting with all the trimmings”, alluding to updated statements on the state of the US economy post the latest GDP, employment and inflation data.

The key question for MFS is whether the Fed will signal April’s CPI and the latest PCE readings are low enough to infer the start of a downward trend in inflation again.

Equally, the market will be looking to the "dots" as to whether a higher ‘neutral’ rate has remained the considered opinions from FOMC members or if it has come down again.

Next week is also a big week domestically with the NAB Business Confidence out on Tuesday, post the national holiday on Monday, while Thursday sees the release of the May unemployment data.

Overseas, Japan is in focus with the Q1 GDP on Monday, PPI on Wednesday, April industrial production, and the Bank of Japan policy meeting and policy statement on Friday.

China reports May PPI and CPI on Wednesday and the UK has a swathe of economic releases, also on Wednesday, including May GDP.

On Friday, New Zealand reports the May Business Manufacturing Index, while in the US, Treasury Secretary Yellen speaks and the University of Michigan consumer sentiment and inflation expectations are released.

Turning to the corporate calendar, Origin Energy ((ORG)) hosts an Investor Briefing on Wednesday and the ASX ((ASX)) host its own Investor Briefing on Thursday.

ALS Ltd ((ALQ)) goes ex-dividend on Wednesday, followed by Champion Iron Ore ((CIA) and Incitec Pivot ((IPL)) on Thursday.

For a calendar of earnings result releases and a summary of earnings results to date, refer to FNArena's Corporate Results Monitor (https://www.fnarena.com/index.php/reporting_season/)

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