The Top 3 Things to Watch in the Markets Next Week
1- Federal Reserve Decision:
– At the conclusion of the Federal Reserve’s meeting on Wednesday, market watchers will focus on the number of interest rate cuts officials will signal for the rest of 2024.
– Employment data on Friday showed accelerated growth in jobs and wages in May despite a rising unemployment rate, leading markets to reduce their expectations for interest rate cuts this year. The first rate cut is now expected in September.
– Recent comments from Federal Reserve officials have indicated that they are not in a hurry to cut interest rates as inflation remains persistent and growth expectations remain strong.
2. UK Data:
– Market participants will closely monitor the latest UK jobs report on Tuesday as they attempt to gauge whether wage pressures are easing quickly enough to make a rate cut from the Bank of England likely in the near term.
– Meanwhile, April’s GDP data, expected on Wednesday, is projected to show a slowdown in growth following a strong expansion of 0.6% in the first quarter.
3. Bank of Japan:
– The Bank of Japan will conclude its two-day meeting on Friday. Governor Kazuo Ueda has already hinted at a gradual winding down of the bank’s long-standing quantitative easing program, emphasizing that policymakers will move “cautiously” regarding raising interest rates after the first hike since 2007 in March.
– The Bank of Japan and the government are concerned that a weak currency could undermine steady wage gains.
