By Dow Jones Newswires staff


Below are the most important global events likely to affect FX and bond markets in the week starting June 8.

U.S. inflation data in the coming week will be closely watched as investors gauge how likely it is that the Federal Reserve will raise interest rates this year.

In Europe, focus will be on a European Central Bank meeting, where a rate increase is widely expected. A rate decision is also due in Canada.

In Asia, investors will focus on a slate of releases, with China set to publish trade and price-trend data, while Japan will report growth figures that will provide a snapshot of economic conditions across the region, alongside India's inflation data.


U.S.


U.S. inflation data for May are due on Wednesday and could be a key piece of data ahead of the Federal Reserve's rate decision on June 17 as investors look for clues on whether the central bank could consider raising interest rates.

The data follow U.S. figures for May that showed much stronger jobs growth than expected, leaving the prospect of a rate cut--which had looked strong prior to the start of the U.S.-Iran war--increasingly unlikely.

Instead, signs of high inflation, and particularly signs that high energy prices are filtering through into other areas of the economy, would increase expectations that the Fed's next move will be a rate hike. U.S. money markets currently price a 98% chance of a 25 basis-point rate increase by the Fed by December, LSEG data show.

"May's consumer prices report will be a key gauge on the impact of rising prices on consumer spending," analysts at AJ Bell said in a note.

"With inflation running persistently ahead of the Fed's 2% target, a hotter-than-expected print will make it difficult for policy makers to argue for further rate cuts," they said.

Details on pipeline inflationary pressures will also be in focus when May producer price figures are released on Thursday.

Other economic data include April trade and existing home sales on Tuesday and the University of Michigan's preliminary consumer survey for June on Friday.

The U.S. Treasury will auction three-year notes on Tuesday, 10-year notes on Wednesday and 30-year bonds on Thursday.


Canada


The Bank of Canada is expected to leave interest rates on hold at 2.25% on Wednesday, according to market pricing on LSEG.

The BOC is likely to signal caution about the economic outlook before the July meeting when it will unveil its new projections, analysts at The Investment Institute by Unicredit said in a note. "The bank will seek to assess the impact of the Middle East crisis on inflation, despite Canada having entered recession after first-quarter GDP shrank by 0.1% in annualised terms following a 0.6% fall in the fourth quarter of 2025."

Inflation remains within the BOC's target range of 1-3% at 2.8% in May. Unicredit agrees with market expectations for just one rate rise by year-end.


Eurozone


The European Central Bank's monetary policy decision on Thursday is the week's highlight, where a 25-basis-point interest-rate hike is fully expected to counteract inflationary impacts from higher oil prices due to the Middle East conflict.

This will take the eurozone deposit rate up to 2.25%.

"In the absence of hard evidence of second-round effects and amidst the heightened uncertainty, this move [to raise rates] is predominantly meant to mitigate the risk of de-anchoring inflation expectations," Morgan Stanley analysts said in a note.

Focus will center on what clues ECB policymakers give on the likely timing of any potential future rate hikes.

Morgan Stanley's analysts expect the policy paragraph of the statement, featuring data dependence and a meeting-by-meeting approach, to remain unchanged.

"The Council will want to keep all options on the table, stressing again the high level of uncertainty, the need for vigilance, and its readiness to act."

The ECB will also roll out new staff forecasts on inflation and GDP.

Beyond one anticipated on June 11, Danske Bank analysts expect one additional 25-basis-point hike in the third quarter and then a reversal in 2027, analysts Rune Thyge Johansen and Sofie Grundvad Pedersen said in a note.

"Crucially, the fiscal backdrop is far less supportive than during the 2022 energy crisis, limiting amplifications of inflation by fiscal policy," they said.

Prior to the ECB meeting, Germany will release manufacturing orders data on Monday and industrial production data on Tuesday, both for April. Italian industrial production data are due Wednesday. Final CPI inflation data for May are due from Germany, France and Spain on Friday.

Germany will sell February 2033-, February 2035- and August 2053-dated green Bunds on Tuesday and February 2036-dated conventional Bund on Wednesday. Other issuers are the Netherlands, Austria and Finland on Tuesday, Portugal on Wednesday and Italy on Thursday.


U.K.


The key data of the week in the U.K. will be gross domestic product figures for April on Friday as investors gear up for a Bank of England decision on June 18. BOE interest rates are expected to be left on hold, but markets will be watching for any signals about the prospect of rate hikes in the months to come.

GDP could show a slight economic contraction in April after growing by 0.6% during the first quarter, reflecting the impact of high oil prices stemming from the Middle East conflict, Deutsche Bank chief U.K. economist Sanjay Raja said in a note.

"The cost of living and the cost of doing business will have likely increased, weighing on activity and investment", he said. "Activity will remain subdued as the energy shock catches up with households and businesses."

Trade and industrial production data for April are also released Friday.

Other key data include the RICS U.K. house-price survey for May on Thursday.

Recent RICS surveys have "struck a very depressed tone" given economic uncertainty and higher mortgage rates, Investec economist Philip Shaw said in a note. However, a handful of other solid indicators, notably recent solid mortgage approval numbers, have implied that the domestic housing market is "enjoying greater momentum," he said.

The U.K will sell gilts maturing in May 2029 on Thursday.


Scandinavia


Final Swedish inflation figures for May are due on Thursday. Provisional data, released a week earlier, showed CPI inflation rose by a bigger-than-expected 0.8% versus a year earlier.

Norway will hold a bond auction on Wednesday and Sweden will auction inflation-linked bonds on Thursday.


Switzerland


Switzerland will hold a bond auction on Wednesday.


Turkey


Turkey's central bank announces an interest-rate decision on Thursday, when it is expected to leave the one-week repo rate unchanged at 37.00%.

Economists at HSBC said they expect rates to stay on hold despite "a more challenging inflation outlook."

"We think a key reason why there has been no rate rise after the outbreak of the Iran war is the absence of FX demand from Turkish residents." If this were to change, or if non-resident outflows intensified, the economists would expect a rate increase, they said.


Japan


Japan will release revised GDP growth data on Monday. For the January-March quarter, the Japanese economy is expected to have grown at a slower pace than initially estimated due to weaker-than-expected capital spending.

In the preliminary report, real gross domestic product increased at an annualized rate of 2.1%.

Economists expect the impact of the Middle East conflict to appear later in the year. BNP Paribas economists anticipate the recovery trend in capital expenditure to remain on track, unless critical supply chain bottlenecks emerge, which could drastically weigh on production and corporate revenue.

The Bank of Japan is scheduled to make outright purchases across multiple sectors of Japan's government bond market on Thursday. These include sovereign securities with tenors of more than 1 year and up to 3 years, those with tenors of more than 5 years and up to 10 years, and those with tenors of more than 10 years and up to 25 years. The planned purchases are expected to support the domestic bond market.

The Ministry of Finance is scheduled to auction about 600 billion yen of 30-year JGBs on Wednesday. The 30-year JGBs to be issued in June will be a reopening of the April 2026 issue, according to the ministry. The upcoming 30-year issue is expected to garner bidding interest from investors seeking high yields, which are likely to be offered.


China


China reports trade and inflation data for May that will likely show continued strength in exports and an uptick in price growth.

A poll by The Wall Street Journal predicts that exports grew at a near-13% clip, softer than the prior month but still robust. Consumer inflation is expected to have picked up slightly to 1.3% on year, with factory-gate price growth accelerating markedly to 3.7%.

As China's trade profile tilts increasingly toward tech-related products, higher prices in the sector will likely keep boosting both exports and imports, ING economists said.

Economists at HSBC look for the inflation figures to reflect higher manufacturers' input and output prices due to the Middle East conflict. The rapid price increases of electronic components driven by the global AI investment boom, plus China's efforts to

curb excess competition, may provide additional support.


India


India is scheduled to release May consumer-price index data on Friday. ANZ Research projects consumer prices to have risen 4.0%, which would mark the highest inflation rate since January 2025. Food inflation likely edged higher, although average daily food prices of major items showed only a slight sequential rise in prices, said economist Dhiraj Nim.

There is a risk of inflation accelerating, though domestic gasoline price increases remain modest compared with fuel price trends elsewhere in Asia, ING economists said. The key risk to the outlook lies in potential second-round effects on food inflation, they said.


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