BRICS Surpasses the US in Gas Trade to Europe

Economic

Commodity

Summary:

The BRICS alliance has surpassed the US in gas trade to Europe for the first time in almost two years.

The BRICS alliance has surpassed the US in gas trade to Europe for the first time in almost two years. BRICS member Russia is the top supplier of LNG gas to Europe and outperformed the US despite facing sanctions. The spike comes despite Europe trying to limit its dependency on Russian oil but several countries in the eastern European region rely heavily on imports from the country. This makes Russia the top supplier of LNG gas supplier to Europe elbowing the US in global trade deals.

The development comes when BRICS is looking to topple the US dollar as the world’s reserve currency. The bloc aims to control the global oil and gas sector to bring the US dollar down.

BRICS: Russia Beats the US in Gas Trade to Europe Despite Facing Sanctions

BRICS member Russia has been initiating gas trade deals with Europe and other countries despite facing sanctions from the US. The Putin administration has bypassed sanctions and conducted deals with Europe, Africa, Asia, and its BRICS counterparts. LNG shipments from Russia to Europe touched a high of 15% this month in May 2024. On the other hand, the US-based LNG gas to Europe dipped to 14% this month.

“It’s striking to see the market share of Russian gas and (liquefied natural gas) inch higher in Europe after all we have been through, and all the efforts made to decouple and de-risk energy supply,” said Tom Marzec-Manser, the Head of Gas Analytics at Consultancy ICIS to the Financial Times.

The US was the top supplier of LNG gas to Europe after the White House pressed sanctions against BRICS member Russia. However, Marzec-Manser explained that Russia’s dominancy in the LNG gas sector in Europe might not last long. “Russia has limited flexibility to hold on to this share (in Europe) as demand rises into next winter. Whereas overall US LNG production is only growing with yet more new capacity coming to the global market by the end of the year,” he summed it up.

Source：Watcher

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Warren Takunda

Cryptocurrency

Bitcoin starts a new week in an altogether different mood to much of June, trailing one-month lows.

Bitcoin price action has taken a turn for the worse after challenging $70,000 resistance multiple times. What could be next?

As a stubborn trading range continues to dictate Bitcoin market moves, traders and analysts are considering what the immediate future has in store — and whether bulls or bears will be in control.

A stream of United States macroeconomic data and associated Federal Reserve commentary appeared to take its toll on Bitcoin last week, with the largest cryptocurrency shedding nearly 5% and briefly dipping below $65,000.

While fewer macro triggers are due this week, employment figures may still surprise as the U.S. inflation picture delivers mixed signals to risk assets.

Many are thus playing a game of wait-and-see when it comes to BTC/USD — until the range shows signs of shifting, there is little to do but wait.

Under the hood, meanwhile, Bitcoin miners are adjusting to the new post-halving reality as a “capitulation” phase continues to play out. Network fundamentals are cooling, with mining difficulty set to drop by around 1.3% this week.

With all-time highs seemingly out of reach for the time being, Cointelegraph takes a closer look at the main BTC price talking points for market observers and participants.

BTC price dices with support failure

A bruising week for Bitcoin bulls finally ended with BTC/USD down 4.3% at the weekly close, data from Cointelegraph Markets Pro and TradingView confirms.

After hitting one-month lows, bulls managed a modest turnaround to bring the market focus back to $66,000 — a level that remains in play as of June 17. $66K BTC Price Now ‘Critical’—5 Things to Know in Bitcoin This Week_1

$66K BTC Price Now ‘Critical’—5 Things to Know in Bitcoin This Week_1

BTC/USD 1-hour chart. Source: TradingView

While it could have been worse, the “red” week offered little hope to those seeking a definitive resistance/support flip at the key levels of $69,000 and higher.

“Bitcoin remains red on 3-day Predator. Still no significant sign of a trend shift just yet,” trading suite DecenTrader told subscribers on X about the latest signals from its proprietary trading indicators.

Data from monitoring resource CoinGlass shows the extent to which $66,000 is now key in terms of order book liquidity, with $67,300 fulfilling a similar role as resistance. $66K BTC Price Now ‘Critical’—5 Things to Know in Bitcoin This Week_2

$66K BTC Price Now ‘Critical’—5 Things to Know in Bitcoin This Week_2

BTC liquidation heatmap (screenshot). Source: CoinGlass

Thus, a narrow corridor has evolved, with TradFi unable to shift the status quo during the week’s first Asia trading session.

“Sideways price action is - generally speaking - not a bad thing. A lack of patience is,” popular trader Jelle continued in his latest X analysis.

“Pretty sure this will resolve up, just like all the other times.”

BTC/USD chart. Source: Jelle

Jelle described the weekend’s movements as “typical” for Bitcoin.

“Bullish divergence is locked in, and price is trying to hold above $66,300. Time for bulls to wake up, and push this back into the range,” he added about relative strength index (RSI) values.

Others also sought to find a note of optimism amid the otherwise lackluster BTC price action now in place for several weeks. Among them was commentator Matthew Hyland, who noted that Bitcoin’s 10-week simple moving average (SMA) remained intact through the recent dip.

$66K BTC Price Now ‘Critical’—5 Things to Know in Bitcoin This Week_4

BTC/USD 1-day chart with 10-week SMA. Source: TradingView

Jobless claims highlight cool macro week

After the deluge of macroeconomic data in June, the coming week offers risk-asset traders some welcome relief.

Only U.S. jobless claims form a potential catalyst for volatility across crypto, with the sector showing itself to be sensitive to unemployment surprises throughout 2024.

The Juneteenth holiday gives the entire U.S. market a break on June 19, with the jobless claims due a day later.

Commenting on the week ahead, trading resource The Kobeissi Letter alluded to the impact of ongoing data prints on market expectations for a significant loosening in U.S. financial policy.

“Massive swings in Fed expectations continue to be incredibly profitable to trade this year,” it summarized about the fluctuating bets on Federal Reserve interest rate cuts this year — a key bullish impetus for Bitcoin and altcoins. $66K BTC Price Now ‘Critical’—5 Things to Know in Bitcoin This Week_5

$66K BTC Price Now ‘Critical’—5 Things to Know in Bitcoin This Week_5

Fed target rate probabilities as of June 17 (screenshot). Source: CME Group

The latest estimates from CME Group’s FedWatch Tool show that the Fed’s September meeting remains the earliest likely date for cuts to begin. The next meeting in July currently only has around 10% odds of resulting in a cut.

“For me, the takeaway from last week is that the data is clearly pointing towards a shift to more accommodative monetary policy—and potentially sooner rather than later,” financial commentator Tedtalksmacro wrote in part of an X thread at the weekend.

“Reinforcing my view that dips are buying opportunities for risk assets like cryptocurrencies + stocks.”

BTC/USD chart. Source: Tedtalksmacro

Tedtalksmacro agreed that $66,000 was the key level to hold in the face of any macro surprises.

“For the upcoming week it's critical that Bitcoin maintains it's support at $66,000 USD - if broken, sellers could take a stronghold on the market and force quick liquidations out of the bulls,” he warned.

Bitcoin miner capitulation in full swing

Bitcoin network fundamentals continue to take stock of recent gains as miners face a fresh period of economic upheaval.

Current estimates from BTC.com foresee a roughly 1.3% drop in mining difficulty at the next automated readjustment on June 20. $66K BTC Price Now ‘Critical’—5 Things to Know in Bitcoin This Week_7

$66K BTC Price Now ‘Critical’—5 Things to Know in Bitcoin This Week_7

Bitcoin network fundamentals overview (screenshot). Source: BTC.com

This underscores an overall mixed landscape since April’s block subsidy halving, with miners continuing to adjust to the new economic reality.

As Cointelegraph reported, a “capitulation” phase is currently underway on hashrate, with the 30-day moving average below its 60-day equivalent. This, as shown by the hash ribbons metric, is indicative of a pre-breakout BTC price phase.

“Following the recent Bitcoin halving, we have observed nearly a month of challenging conditions for miners,” Kripto Mevismi, a contributor to onchain analytics platform CryptoQuant, wrote in one of its Quicktake market updates last week.

Hash ribbons analysis suggested that miners themselves “do not appear to have the power to significantly influence the price” during the current capitulation.

“The analysis of hash ribbons and the current market dynamics suggest that despite the challenges faced by miners post-halving, the Bitcoin market remains strong. The sustained demand is a positive indicator of market resilience and strength, highlighting that the current price stability is supported by more than just miner activity,” Kripto Mevismi concluded.

“This period demonstrates the market's ability to maintain a solid foundation even amidst potential adversities, indicating a strong and healthy Bitcoin ecosystem.”

Bitcoin Hash Ribbons indicator. Source: LookIntoBitcoin

Hash ribbons’ last capitulation signal came in August 2023, when BTC/USD dropped to $25,000.

BTC wallet numbers erase bear market wipeout

Much has been made of Bitcoin whale behavior in recent weeks, with sustained accumulation ignoring changing short-term price narratives.

This has led to an assumption that large-volume traders overwhelmingly expect BTC price upside to reemerge, providing easy gains in the coming weeks to months.

Meanwhile, smaller-volume wallets are experiencing a renaissance of their own.

The latest data from research firm Santiment shows that wallets with 10 BTC or more now number 16.16 million — the most since June 2022. This reflects 82% of the BTC supply.

“Much has changed since then, including a rise in Bitcoin's market value by +226%,” it noted in a dedicated X post on June 17.

Santiment went on to reference the fall of exchange FTX at the end of 2022, which triggered the Bitcoin bear market capitulation and subsequent bullish comeback at the start of 2023.

“Many believe that FTX was successfully suppressing cryptocurrency prices in the 2nd half of 2022,” it noted.

“But since the exchange’s collapse in November, 2022, there has been an undeniable semblance of correlation between 10+ BTC wallet holdings and the coin’s overall market value.”

Bitcoin wallet numbers data. Source: Santiment

Bitcoin ETF coins offer “strong support indicator”

Whales also figure within the overall hodling trend for 2024.

Coins bought before the launch of the U.S. spot Bitcoin exchange-traded funds (ETFs) in January have broadly stayed dormant since.

As shown by CryptoQuant contributor Mignolet, that practice has turned their owners into longer-term holders rather than mere speculators.

“Right before the ETF approval, holders sold their Bitcoin (blue box). However, in the green box, the short-term holders accumulated during the consolidation phase have transitioned to long-term holders of 3-6 months and are continuously being accumulated without being sold (green box),” a Quicktake post from the weekend explained.

“Since most of these holdings belong to whales, this could serve as a strong support indicator.”

Bitcoin sum coin age distribution (screenshot). Source: CryptoQuant

As Cointelegraph continues to report, Bitcoin’s short-term holder entities — those holding a given amount of BTC for up to 155 days — represent a key support trendline during the current bull market.

Their aggregate cost basis is currently just above $62,000.

Source: Cointelegraph

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Warren Takunda

Economic

Stocks

Shares steadied on Monday while the euro remained on the defensive amid political turmoil in Europe, as investors look for direction from a string of central bank meetings in the region this week as well as fresh U.S. economic data.

European stocks recouped a fraction of their losses from last week when French President Emmanuel Macron called a snap election, with banks leading the mini-rally on Monday up 1% against a 0.2% rise in the benchmark STOXX index .

Macron's surprise move came after far right and leftist parties gained ground against his centrist administration, raising investor concerns about a budget crisis and triggering a brutal selloff in French markets.

The euro has become emblematic of this angst, down 0.04% to $1.07025, after falling to its lowest since May 1 at $1.06678 on Friday.

European Central Bank policymakers told Reuters they had no plans to launch emergency purchases of French bonds to stabilise the market after yield spreads over German bunds widened dramatically amid a flight to safety.

"A French challenge to the region's fiscal arrangements would be problematic and have far-reaching implications," warned analysts at JPMorgan. "At this stage, the situation in the run-up to the first round of voting is still very fluid."

Central banks in Australia, Norway and the UK are all expected to hold rates steady at meetings this week, though the Swiss National Bank (SNB) might ease given the recent strength of the Swiss franc.

Markets have boosted the probability of a cut to 75% as political uncertainty in France drove the euro to a four-month trough at 0.9505 francs on Friday.

FRAGILE CHINA

Asian share markets had earlier fallen as mixed Chinese economic news underlined the country's fragile economic recovery.

While retail sales beat forecasts thanks to a holiday boost, the flurry of data was otherwise largely negative, with Chinese blue chips off 0.2% after industrial output and fixed-asset investment both underwhelmed.

U.S. shares looked set to follow the muted mood, with S&P 500 futures steady, while Nasdaq futures added 0.1% following a run of record finishes.

Analysts at Goldman Sachs have raised their year-end target for the S&P 500 to 5,600, from 5,200 and the current 5,431.

"Our 2024 and 2025 earnings estimates remain unchanged but stellar earnings growth by five mega-cap tech stocks have offset the typical pattern of negative revisions to consensus EPS estimates," they wrote in a note.

The main U.S. data of the week will be retail sales for May on Tuesday, where a 0.4% bounce is expected after a 0.3% drop in April, while markets have a holiday on Wednesday.

At least 10 policymakers from the Federal Reserve are due to speak this week and will no doubt address the market's wagers for two rate cuts this year.

While the Fed itself sounded a hawkish note last week, a trio of soft inflation numbers led futures to price in a 76% chance of a cut as early as September and 50 basis points of easing for the year.

The dollar was stable on the yen at 157.45 , after briefly spiking above 158.00 on Friday when the BOJ said it would start tapering bond buying a little later than many had wagered on.

Japan's Nikkei slipped 1.9% on Monday, with investors now facing a six-week wait to hear details of the Bank of Japan's next tightening steps.

In commodity markets, gold dipped 0.5% to $2,321 an ounce , unwinding some of last week's 1.7% bounce.

Oil prices held firm after the bumpy economic data from China offset hopes for a boost to demand from the summer driving season in the northern hemisphere.

Brent rose 2 cents to $82.64 a barrel as of 0812 GMT, while U.S. crude likewise nudged up to $78.49 per barrel.

Source: Reuters

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Alex

Central Bank

Economic

At its policy meeting on Friday, the BOJ decided to start trimming its huge bond purchases and announce a detailed plan in July on reducing its nearly $5 trillion balance sheet, taking another step toward unwinding its massive monetary stimulus.

Governor Kazuo Ueda gave few clues on how much the BOJ will actually trim its bond buying, saying only that the taper size will be significant.

“The BOJ has the option of reducing its monthly purchase amount by just one trillion yen. But with the governor having said the size would be ‘significant,’ there’s a good chance it will taper by around 2 trillion yen,” Sakurai told Reuters in an interview.

The BOJ currently buys roughly 6 trillion yen of government bonds per month with an allowance of 5-7 trillion yen. It will likely trim the purchase to 4 trillion yen per month, he said.

The BOJ’s decision to announce its bond-tapering plan at its next meeting in July 30-31 has heightened uncertainty on whether it will hike short-term interest rates at the same meeting, or hold off until later in the year to avoid upending markets.

Sakurai, who retains close ties with incumbent policymakers, said the BOJ will likely forgo raising rates in July and wait for more clarity on whether summer bonus payments and wage gains will help consumption will rebound.

“The BOJ is probably in no rush to raise short-term rates as doing so would push up mortgage loan rates and hurt already weak housing investment,” Sakurai said. “The next interest rate hike will likely happen in autumn or early next year.”

If economic and price developments move roughly in line with its projection, the central bank may raise interest rates to 0.5% by the end of next year, Sakurai said.

After ending eight years of negative interest rates in March, the BOJ currently sets the short-term policy rate target in a range of 0-0.1%.

Many economists expect the BOJ to hike interest rates to 0.25% this year, though they are divided on whether it will come in July or later in the year.

Sakurai said the yen’s sharp falls likely forced the BOJ to proceed quicker than initially planned in embarking on quantitative tightening (QT) and scale back its balance sheet.

Japan’s battered currency has become a headache for policymakers by inflating import prices, which in turn boosts living costs and hurting consumption.

Rather than trying to slow the yen’s declines through rate hikes, the BOJ likely opted to allow long-term interest rate to rise more by announcing a bond tapering plan, he added.

“The BOJ made a big step forward in normalising policy by deciding to taper,” Sakurai said, adding that many bankers likely saw the need to steadily trim its balance sheet.

“In a way, the weak yen helped BOJ policymakers get what they wanted.”

Source:Reuters

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Warren Takunda

Economic

The ripple effects of the U.S. Federal Reserve's 11-month hold on interest rates is already being felt in Asia.

The debate over the domestic impact of what is shaping up as a delayed and shallow Fed easing cycle is far from settled. But the allure of U.S. interest rates staying in a range of 2% to 4% for several years is drawing money from the rest of the world into the U.S., with the country now accounting for one-third of global capital flows according to International Monetary Fund figures.

Asia is no exception. The Bloomberg Asia Dollar Index, a basket of Asian currencies with high liquidity and large trade flows with the U.S., has weakened 13% over the last three years as capital outflows undercut the region's currencies.

Yet the risks of this outpouring of capital getting out of control do not appear large.

Asia's fundamentals are quite different than they were at the time of previous big selloffs, like the 2013 "taper tantrum" which battered the Indian rupee and Indonesian rupiah or the 1997 Asian financial crisis.

Asian economies are much more resilient, foreign exchange reserves are larger and there is stronger regulatory oversight of foreign currency debt. These factors have contributed to a controlled depreciation of most Asian currencies this time, with minimal impacts so far on the broader economy.

Additionally, monetary policy in Asia is now more attuned to external and financial risks. While local fundamentals were the primary driver of rate hike decisions in 2022 and 2023, these days the Fed is in focus as Asian central banks contemplate whether to begin cutting rates. Even the Bank of Thailand has been hesitating to preempt the Fed in trimming rates despite experiencing deflation for much of the year to date.

The attention to the Fed is partly a function of the market's growing preference for the dollar as the "higher for longer" theme gains traction.

Despite Asian economies' robust external balances, going against strong market forces can lead to significant currency pain. While it would be possible to temporarily decouple from the Fed, signaling alignment with it over the long term, in the way the European Central Bank has, could help minimize capital outflow and currency risks.

Ortigas Center in Metro Manila: Asia's fundamentals are quite different than they were at the time of previous big selloffs.

Admittedly, conditions in Asia may make this approach tricky.

While inflation has entered a sticky patch in many Asian economies and uncertain food inflation clouds the near-term outlook, the region's long-term inflation challenge is likely smaller than that of the U.S.

There are good reasons to believe that the U.S. has entered a period of structurally higher inflation. With globalization on its backfoot and new tariff and import barriers rising, a green transition underway and an aging population, U.S. inflation is likely to average 2% to 3% over the next several years, up from a long-term pre-pandemic average of 1.8%.

Many of the factors affecting the U.S. apply to Asia as well, particularly its developed economies. But their impact will likely be dented by the disinflationary force of Chinese imports.

China's rising manufacturing surplus means that its exports are likely to stay cheap for several years. This will probably not impact Western economies so much due to tariffs and other import restrictions.

Asia, though, is another matter and the disinflationary impact of Chinese imports is likely to be significant, particularly in the manufacturing sector, given the region's high reliance on China for intermediate inputs.

This would suggest the region's economies should be looking at deeper rate cuts than the U.S. This is especially the case for Southeast Asia and India. In both areas, the case for policy support for growth is strong, given that gross domestic product growth has slipped substantially below pre-pandemic trend lines.

A dramatic shift in policy considerations seems unlikely. In an environment of broad dollar strength, central banks will be cautious in adding to currency depreciation pressures that could end up amplifying macrofinancial risks. Most seem likely to cumulatively cut rates by no more than half a percentage point through next March.

If the gap in real policy rates between Asia and the U.S., factoring in inflation, does widen, this will make Asian assets more attractive on margin. This should allay concerns of capital flight, assuming the market looks beyond the difference in headline interest rates.

Other factors are also likely to come to the fore as the transition to higher-for-longer rates proceeds. After all, the price of capital is not the sole arbiter of capital allocation decisions. Interest rate differentials matter a lot for leveraged investors like hedge funds. But returns for institutional investors, who have longer-term horizons, are contingent on a host of factors, including growth prospects, inflation and exchange rate regimes, institutional quality, policy frameworks, sovereign ratings and political risk.

For such investors, Asia should remain a compelling choice, with a number of major markets featuring investment-grade ratings, a relatively favorable inflation environment, proven resilience to external shocks, stable political outlooks, credible policy frameworks and promising supply chain prospects.

Although major institutional investors have recently been increasing their portfolio allocations for Asian markets, such exposure typically represents only 7% to 8% of assets under management. So there is considerable scope for more funds to be sent to the region. A similar dynamic could be in the works with foreign direct investment as well.

Ultimately, sustained inflows of long-term capital would help drive a self-reinforcing cycle of growth, investment and external resilience in Asia. This would not only be positive for the region's long-term economic prospects, but also further enhance its ability to weather the financial stresses that may periodically arise as the world adjusts to the new rate environment.

Source: NikkeiAsia

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Economic

On Friday, the Nasdaq marked its fifth consecutive record closing highs driven by the tech frenzy. In contrast, the S&P 500 and the Dow Jones closed marginally lower, reacting to June's soft Michigan Consumer sentiment reading.

For the week, the Nasdaq gained 3.47%, the S&P 500 gained 1.58%, and the Dow Jones lost 209 points (-0.54%). The divergence in these weekly numbers provides a clear insight into the market dynamics, indicating where long and short positions are working best in US equity indices.

Consumer sentiment and inflation data

Friday night's data indicates the preliminary University of Michigan Consumer sentiment index fell for a third straight month. It fell to 65.6 rather than the expected 72, the lowest since November. The current conditions and expectations subindices both fell while five-year inflation expectations increased to 3.1% from 3%.

The decline in consumer confidence suggests that the resilience of the American consumer and the US economy are being tested. As households run down their savings to combat higher interest rates and cost-of-living pressures. Keeping in mind, consumption spending accounts for about two-thirds of the US GDP. Hence the saying, "As the US consumer goes, so goes the US economy."

Federal Reserve

With the Fed now out of the blackout period, Fed Members Mester and Goolsbee noted that last week's cooler inflation data was welcome news. However, they want to see a few more months of cooler inflation data before cutting rates. Similar thoughts can be expected to be echoed by most of the sixteen Fed members scheduled to speak this week.

Key economic events

Aside from the busy lineup for Fed Speakers, the key events this week will be Retail Sales and S&P Global Flash PMIs, on Tuesday and Friday respectively. The rates market starts this week pricing in a 68% chance of a 25 bps Fed rate cut in September, and a full 50 bps of Fed rate cuts before year-end.

S&P 500 technical analysis

The S&P 500 secured its seventh weekly gain in eight weeks, starting this week by eyeing resistance in the 5500 area. Should the rally extend above 5500, there is blue sky until trend channel resistance around 5670, which is almost another 4.5% higher than the current price.

On the downside, there is a band of initial support at 5370/40 and below that support from the March 5260 high. However, the more important layer of support is at 5225 coming from the uptrend support from the October 4103 low. A sustained break below here in addition to the May 5191 low, would indicate that the uptrend has run its course and that a deeper pullback is underway towards support at 5000/4950.

Wall Street: Tech-driven Nasdaq Surges While S&P 500 And Dow Fall_1

Nasdaq 100 technical analysis

Following its month-end rebalancing-related sell-down into the end of May, the Nasdaq 100 extended gains last week. With the rally extending well into overbought territory, this warns that the chances of a pullback are increasing. Yet, we may first see a test of the trend channel resistance at 20,000 as the melt-up intensifies before a pullback commences.

On the downside, there is initial support at 19,000/18,900 and then the March highs 18,450 area. However, the more important layer of support is at 18,200/000, coming from the uptrend support from the October 14,058 low and the 18,189 swing-low of May. A sustained break below both these levels would indicate that the uptrend has run its course and that a deeper pullback is underway towards support of 17,000. Wall Street: Tech-driven Nasdaq Surges While S&P 500 And Dow Fall_2

Wall Street: Tech-driven Nasdaq Surges While S&P 500 And Dow Fall_2

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Warren Takunda

Economic

Below are the most important global events likely to affect FX and bond markets in the coming week starting June 17.

Markets await a raft of interest-rate decisions, including in the U.K., Australia, China, Indonesia, Switzerland and Norway, while the performance of French assets will be watched closely as investors get increasingly nervous ahead of snap elections in the country.

U.S. economic data will be scrutinized carefully amid continued uncertainty about when interest-rate cuts will begin after Federal Reserve policymakers forecast just one rate cut for 2024 but data showed slowing inflation.

In Asia, eyes will be on a fresh batch of China data, including home prices, which will be scrutinized for signs that officials' latest round of stimulus measures are boosting the economy, as well as inflation data out of Japan.

U.S.

U.S. Federal Reserve forecasts suggest that interest rates could stay higher for longer, with the prospect of only one rate cut this year, or possibly none at all. Many policymakers still forecast two rate cuts in 2024, however, and investors aren't yet convinced that rate cuts won't come soon, particularly after recent weaker consumer-price and producer-price inflation data.

Money markets currently price in a high chance of a rate cut in September, according to Refinitiv data, but investors will need to see evidence of the economy weakening to confirm this and strong data could easily reverse those expectations.

In that light, U.S. retail sales data and industrial output figures for May due on Tuesday will be closely watched. Focus will also center on provisional manufacturing and services purchasing managers' indexes for June due on Friday. Other forward-looking indicators include the New York Empire State manufacturing index for June on Monday and the Philly Fed index on Thursday.

Housing starts data for May and weekly jobless claims are due on Thursday and existing home sales on Friday.

The coming week could be quieter, however, with a U.S. public holiday on Wednesday.

"The calendar is somewhat data light in terms of top indicators next week," Investec economists said in a note.

CANADA

Investors will parse upcoming Canadian economic data as they assess whether the Bank of Canada could follow up the interest-rate cut it announced earlier this month with another at next month's meeting.

Canadian housing starts data for May are due on Monday, followed by retail sales data for April, and May producer prices data on Friday.

BRAZIL

Brazil's central bank announces a decision on Wednesday and is expected to keep the Selic rate unchanged at 10.50% as inflation expectations creep up.

"We have come to expect that the Copom [the central bank's monetary policy committee] will no longer promote interest rate cuts this year and will only resume them in 2025," analysts at Rabobank said in a note.

EUROZONE

French assets, particularly government bonds and banking stocks, will remain in focus as investors become increasingly nervous ahead of snap elections, with the first voting round due to be held on June 30.

Markets will be scrutinizing opinion polls that are showing strong support for Marine Le Pen's far-right National Rally party, raising concerns about potential political gridlock and excessive fiscal spending. In that light, the European Commission's publication of a report on excessive deficit procedures on Wednesday could attract attention.

Eurozone economic data are expected to show a continued improvement in the region's economy, leaving uncertainty over when the European Central Bank will cut interest rates again.

The central bank cut rates in June but was cautious about signaling further moves due to concerns about inflation. Money markets currently price in a significant chance of another rate cut in September, with a reduction fully priced in for October.

Provisional purchasing managers' surveys for June covering the manufacturing and services sectors' activity in Germany, France and the eurozone due on Friday will be watched closely for up-to-date indications of how the economy is faring.

"According to our forecast, the purchasing managers' indices for June in the eurozone are set to show an overall consolidation of the recent improvement in sentiment," analysts at LBBW said in a note.

Eurozone final inflation data for May and Germany's ZEW economic expectations survey for June will be released on Tuesday, while the eurozone flash consumer confidence indicator for June is due on Thursday.

Slovakia and Belgium will hold bond auctions on Monday, while Greece will sell bonds on Wednesday and Spain on Thursday. Germany and France will each conduct two auctions. Germany will offer EUR4 billion in April 2029 federal notes, or Bobl, on Tuesday and EUR2 billion in August 2054 Bund on Wednesday. On Thursday, France will auction short- and medium-term bonds and will also sell inflation-linked bonds at a separate auction.

U.K.

A Bank of England decision on Thursday and inflation data on Wednesday will be the highlight of a busy week in the U.K.

The Bank of England is widely expected to keep interest rates on hold at 5.25% given recent data showing U.K. wage growth and services inflation remain elevated. Policymakers could also be reticent about making any moves ahead of a general election on July 4, where the opposition Labour Party is widely expected to win.

"We remain of the view that both wage growth and services inflation don't align yet with a sustained return to 2% inflation," said Stefan Koopman, senior macro strategist at Rabobank, in a note.

Focus will center on any clues as to when rates could be cut, whether in August or later, and on how many of the nine BOE policymakers vote to reduce rates. Money markets currently price in a 43% chance of a rate reduction in August, according to Refinitiv data.

Deutsche Bank Research expects the BOE to start interest-rate cuts in August but said it will first need to see more evidence of easing inflationary pressures.

"We think the risks of a further delay to the start of any rate cuts is on the rise, with an August rate cut looking more finely balanced," analysts at the bank said in a note.

U.K. consumer-price and producer-price inflation data for May on Wednesday could provide clues on the rate outlook ahead of the BOE's decision. Analysts see a possibility that headline annual CPI inflation could fall back to the BOE's 2.0% target in May.

A slew of data on Friday will also give indications on how well the economy is performing. Retail sales and public sector finances data for May are due, though the biggest focus will be on provisional purchasing managers' surveys on manufacturing and services sector activity during June.

"The details of May's [PMI] report hinted that momentum in activity could have carried on into June. In particular, intakes of new work improved in manufacturing and optimism on future production rose. For service sector firms, new orders growth cooled but was still positive, and business optimism saw a small gain too," said Investec economist Sandra Horsfield in a note.

The U.K. Debt Management Office plans to sell the July 2029 conventional gilt on Tuesday.

SWITZERLAND

A decision by the Swiss National Bank is due on Thursday amid uncertainty about whether or not it will opt to cut rates again after a surprise reduction at its meeting in March.

Analysts at UniCredit Research have revised their forecasts and now expect the SNB to keep its key rate on hold at 1.50%, having previously forecast another 25 basis-point cut, due to a "robust Swiss economy" and "slightly higher inflation rates in recent months."

Analysts at ING, however, expect another rate cut and argue that the fact the central bank only meets once a quarter gives it fewer opportunities to move rates.

SCANDINAVIA

Norges Bank, Norway's central bank, announces a decision on Thursday and is widely expected to hold interest rates at 4.5% and to reiterate that rates will stay unchanged for some time ahead due to elevated inflation and a solid economy.

Many analysts expect that the central bank's policy rate path will signal that a cut isn't likely until December.

Analysts at SEB point to the fact that Norges Bank's recent Regional Network Survey reported higher expected growth and rising capacity utilization, with wage growth expectations increased. They expect this will justify interest rates being left on hold for a longer period that those of many European peers.

Denmark and Sweden will hold bond auctions on Wednesday.

HUNGARY

Hungary's central bank announces an interest-rate decision on Tuesday, with another cut in the key rate likely from its current level of 7.25%.

"We once again see a cautious central bank that could cut the key rate by only 25 basis points to 7.00% in our view," ING analysts said in a note. "Moreover, it may signal even less (or no) room for further rate cuts in the coming months than in its May forward guidance."

AUSTRALIA

The Reserve Bank of Australia is expected to remain vigilant to inflation risks when it announces a policy decision on Tuesday and publicly reveal once again that it has discussed tightening policy settings.

The official cash rate is almost certainly set to remain at 4.35%, with RBA Governor Michele Bullock repeating recent guidance that all policy options remain on the table.

Bullock faces a mixed economic picture with GDP growth barely detectable in the first quarter of the year, despite a backdrop of stubborn price pressures where inflation data has delivered repeated upside surprises.

Bullock told parliament last week that the RBA remains ready to do whatever is necessary to stymie inflation and get it back into the 2% to 3% target band within a reasonable timeframe.

How the RBA views government rebates on rents and electricity bills to reduce cost pressures will feature prominently at Bullock's press conference, as will coming stimulus from a rise in basic wages and the delivery of income tax cuts.

Source: DowJones

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