June 10, 2024 Week Ahead: Central Banks, UK Data, and Earnings

The week of June 10, 2024 is here, bringing with it a plethora of events that can potentially affect the state of the economy and the financial markets. 

From central banks’ decisions to inflation and jobs data, here’s what you need to know about this week’s main events:

Fed Rate Decision & US CPI

The Federal Reserve’s upcoming rate decision on Wednesday, June 12, is perhaps one of this week’s most anticipated events. This is because the Fed’s decision can have an impact on the US economy and the financial markets. 

As expectations of rate cuts persist and inflation remains stubbornly high, the Fed’s upcoming meeting could be crucial to understanding the possible economic trajectory of the world’s biggest economy. 

Nonetheless, despite the expectations of 2024 rate cuts, experts believe that the Fed won’t make substantial changes to its monetary policy on Wednesday. Instead, the Fed is expected to keep benchmark rates unchanged at 5.25-5.5% to tame inflation.

In addition to the Fed meeting, this week marks an important one for the US economy as traders and consumers may want to keep tabs on the US CPI release on Wednesday (ahead of the rate decision). The data is projected to reinforce the fact that inflation remains higher than the Fed’s 2% target range.  

UK Jobs, GDP & the Labour Party’s Manifesto 

The UK is also poised for important reports this week with labour data and GDP taking centre stage. On Tuesday, June 11, jobs data will be released, providing valuable insights for the Bank of England (BoE) ahead of its upcoming meeting on June 20. The report will show if “wage pressures are easing” as fast as the BoE would like. Interestingly, average weekly earnings (which don’t include bonuses), increased annually by 6% over the course of the  three months leading up to March. Additionally, this growth could be further accelerated by the 9.8% rise in the UK’s minimum wage in April. 

Besides the jobs data, Wednesday, June 12th’s GDP report will also be helpful to those seeking a bigger picture of the UK’s economic landscape. Wednesday’s release is likely to show softer growth in April (compared to the 0.6% expansion in the first quarter). 

Other key events to keep in mind include the fact that on May 22, Rishi Sunak, the UK’s Prime Minister announced a surprise general election for July 4. As such, traders and consumers alike may want to keep track of the UK’s Labour Party’s manifesto launch which is expected to take place sometime ahead of the upcoming election. The elections affect the financial markets and can reshape the country’s economy.

Bank of Japan’s (BoJ) Rate Decision 

The Bank of Japan (BoJ) is expected to conclude its two-day monetary policy meeting on Friday, June 14. 

The meeting comes a week after BoJ Governor, Kazuo Ueda, stated that “it would be appropriate to reduce still-massive bond purchases as the BoJ exits decades of stimulus.” Kazuo also revealed that the BoJ will approach rate hikes with caution. Notably, the central bank hiked rates for the first time since 2007 back in March, 2024.

It is no secret that Japan’s economy has suffered notable losses in recent months, falling from the world's third-largest economy to the fourth-largest. In addition, the yen has been weakening. Therefore, the BoJ’s decision could have important implications for the yen and the overall Forex market. Only time will tell which route this central bank will take.

More Corporate Earnings

In addition to the economic reports, this week is packed with earnings releases from various companies with the main ones being from Oracle, Broadcom, and Adobe.

Oracle (ORCL)

Cloud computing giant Oracle is expected to report earnings on Tuesday, June 11, after the ring of the bell. 

According to some analysts, Oracle is projected to report an EPS of $1.65 on revenue of $14.6 billion. If these figures materialise they would mark a YoY EPS drop of 1.2% and a YoY revenue growth of 5.4%. 

AI and better-than-expected Infrastructure as a Service (IaaS) are expected to boost the company’s growth in fiscal 2025.

Broadcom (AVGO)

Broadcom is projected to report earnings on Wednesday, June 12, after market close. The American semiconductor company had a strong year so far driven mainly by the growing AI demand. 

Analysts anticipate an EPS of $10.80 on a revenue of $12 billion which would mark an EPS growth of 4.7% YoY and 37.9% in revenue YoY. 

Adobe (ADBE)

Computer software company Adobe is scheduled to report earnings on Thursday, June 13, after the market closes and AI is also set to take centre stage in its results. However, according to some analysts, “sentiment around ADBE remains mixed.” Nonetheless, the overall projections seem to point towards an EPS of $4.39 and a revenue of $5.3 billion.

It is important to note that these are projections and that only time will reveal how these companies actually fared. (Source: Kiplinger)

Conclusion

The week of June 10 is packed with key reports and events that can affect both the financial and economic realms. From central banks’ meetings to earnings releases, traders, analysts, and consumers may want to keep track of the results to see what lies ahead for the economy and the markets.