Key Economic Updates: Inflation, PMIs, and Monetary Policy Decisions Across Switzerland, China, India, Australia, and New Zealand

Switzerland
China
India
Australia
New Zealand

Switzerland

CPI inflation data on Monday is expected to show the headline rate falling back below 2% to 1.8% in June. Markets are still pricing in a 25 basis point hike in September at the moment but that may change if the data matches expectations and, importantly, remains below 2%. Unemployment is also released on Friday.

China

Another set of lackluster data seen on the official NBS manufacturing and non-manufacturing PMIs for June released on Friday. Manufacturing activities continued to contract for the third consecutive month at 49 and growth in the services sector decelerated to a 5-month low at 53.2 from 54.5 in May.

The focus will now turn to the Caixin manufacturing PMI which consists of small and medium enterprises out on Monday. Markets are expecting almost an unchanged condition of 50.2 for June versus 50.9 recorded in May.

The Caixin services PMI will be released on Wednesday with a forecasted slowdown in growth to 56.5 for June from 57.1 in May. Time is running out for the implementation of fresh fiscal stimulus measures.

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India

The manufacturing PMI is released on Monday, where the consensus is expecting a slight growth slowdown to 58 for June from 58.7 in May, its strongest reading since October 2020.

A similar trajectory is anticipated for the services PMI on Wednesday where growth is expected to dip to 60.2 in June from 61.2 recorded in May, a continuation of consolidation from April’s near 13-year high of 62.

Australia

The key highlight for this week will be RBA’s monetary policy decision on Tuesday. The consensus is calling for another 25 basis points hike on the cash rate, bringing it to 4.35% after recent hawkish guidance inferred from the minutes of the prior meeting.

However, the interest rates futures market has implied a reduction in the odds of a 25 bps hike due to the recent softer-than-expected annualized monthly CPI data for May; 5.6% from 6.8% in April and below expectations of 6.1%. As of 29 June, the ASX 30-day interbank cash rate futures has priced in a 28% chance of 25 basis points (bps) hike on the cash rate, down from a 53% chance priced two weeks ago on 16 June.

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On Thursday, we will have the balance of trade for May where April’s surplus of A$11.16 billion is expected to narrow to A$10.5 billion. If it turns out as expected, it will be the narrowest trade surplus since August 2022.

New Zealand

No key data.

Ed Moya

With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.