Trade disputes remain on the surface after esclated tensions between the United States and its G7 counterparts, especially following the withdrawal of US President Donald Trump from his support for the final joint statement of the G7 summit as a result of remarks by Canadian Prime Minister Justin Trudeau that his country would impose retaliatory tariffs on American goods.
Markets are eyeing this week's summit between US President Donald Trump and North Korean leader Kim Young in Singapore.
The highlights of this week's economic data which will have an impact on market movements as follow:
Tuesday - US inflation data
Inflation data in the US will be released for May, a day before the Fed's decision, and the CPI is expected to rise by 2.2% on yearly basis, and these data may affect the Fed's tone.
Wednesday - Fed decision / British inflation data
UK inflation data for May is expected to stabilize near previous month levels, with the annual consumer price index expected to rise by 2.5% after slowing in April to 2.4%. The Bank of England may raise interest rates in August if Inflation rise.
The US interest rate decision is due to be announced on the same day. Interest rates are expected to rise for the second time this year by a quarter basis point to 2%. The markets will then watch the press conference of Federal Reserve Chairman Jerome Powell as well as the Fed's projections for rates and inflation.
Thursday - ECB's decision / Australian employment data
After the strong growth data for the Australian economy, it is now time for the labor market. The economy is expected to add about 18,000 jobs in May following the addition of 22.6 thousand jobs in April and unemployment rate to fall to 5.6%.
All eyes are on the ECB and on what ECB President Mario Draghi will present at the press conference as interest rates are expected to remain unchanged, but ECB is likely to signal that monetary stimulus program may be ended by the end of the year after hawkish comments from the chief economist at ECB on discussing the fate of the bond purchase program.
Friday - BoJ decision / European inflation data
The Bank of Japan is expected to keep its policy unchanged and keep the interest in the negative range and there will be a press conference following the decision for Haruhiko Kuroda, governor of the Bank of Japan.
Also, Eurozone inflation data will be released, and the CPI is expected to rise by 1.9% in May, near to the ECB target.
