The US had put the cat amongst the pigeons ahead of the G7 summit in Canada. It called for the re-admission of Russia into the group of seven. That looked like yet another ploy by the White House to deflect attention away from the disharmony that has been caused by America’s insistence on imposing tariffs against its allies. Confusion reigns.
There is another important meeting that could capture the attention of global markets. It is the face-to-face between the presidents of American and North Korea….
….. This was originally called a summit with high expectations of a resolution regarding the use of nuclear weapons by the North Korean state. But that has since been dialled back to just an exploratory meeting, with no expectations about anything other than a photo-op or a chance to talk shop.
The US will announce inflation numbers for May. In April, the headline inflation rate edged up from 2.4% in March to 2.5%. It was the highest rate since February 2017. That would suggest the Federal Reserve is on course to hike interest-rate later in the week to 2%.
Apart from the Fed, there are two other important interest-rate decisions next week. The ECB has hinted that it wants to start monetary tightening. However, problems in Italy could force Mario Draghi to re-think. The Bank of Japan also has an interest-rate decision to make. Both banks are expected to leave interest rates unchanged this time.
The world’s largest economy is expected to report retail sales for May. In April, they increased 4.6%. Nine of 13 major US retail categories performed better than the previous month.
China will also report retail sales for May. There are signs of fatigue amongst Chinese consumers. The April number missed market expectations. It was also the weakest rise in retail sales since last December.
And finally, Singapore has retail sales figures to report too. In April, they declined 1.5% year on year. That was due to lower vehicle sales, a fall in computer and telecom equipment sales, and a drop in optical goods and books.
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