The Week Ahead: Big Day For The Fed

Will she or won’t she? We will find out soon enough on Thursday morning, when the US Federal Reserve announces its latest interest-rate decision. There is a one in 16 chance that the Fed will raise rates in June. But the odds rise to a 50/50 chance that the hike could come in July. One thing is for certain though… the Fed has the ability to surprise.

There are also interest-rate decisions at the Bank of England, the Bank of Japan, the Swiss National Bank and Bank Indonesia.

The impact of the Fed’s interest rate decision could impact banks that include DBS Group (SGX: D05), UOB (SGX: U11) and OCBC (SGX: O39).

The US has some key economic data to digest ahead of its call on interest rates. They could influence the Fed’s decision. One of the key numbers to watch is Retail Sales for May. In March, Retail Sales in the US increased 3% year on year, which was higher than 1.7% rise the previous month.

China reports Retail Sales too. They grew by 10.1% in April, which was lower than market expectations. A health number could assuage concerns that China’s rebalancing could be coming off the rails.

Staying in China, the world’s second-largest economy reported its seventh straight month of increase in the price of new homes last month. On Friday, it will report data for May. Last month, the National Bureau of Statistics said prices increased by 6.2% year on year in April compared to 4.9% in March.

Meanwhile back in Singapore, the Garden City reports Retail Sales for April. In March, the Statistics Department of Singapore said retails sales rose 5.1% compared to the same month in the previous year. The growth was attributed to demand for cars, pharmaceuticals and household equipment.

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