Week ahead: Fed Powell speeches, consumer data

Traders should brace for a volatile week ahead as the world starts its road to recovery. The 17th day of protests continues for the killing of George Floyd, with the United States seeing spikes in Coronavirus cases. In comparison, New Zealand has no Coronavirus cases as is fully removes Coronavirus restrictions, while Japan, Korea, the United States, and Australia prepare for a potential second wave. Currently, the world approaches 7.53 Million Coronavirus cases, with 421k deaths. Here is your week ahead.

All dates are at NZDT.

Jerome Powell Testifies and FED Speech – Tuesday 16th and Friday 19th June.

With the FED leaving rates unchanged at 0.25% alongside promising low rates until at least 2022, Chairman Jerome Powell sent dovish signals to the markets. Both speeches this week should mirror each other, with both speeches possibly being market movers concerning the USD and the major indices. With an increase in outbreaks in individual states, a second wave is definitely on the table for the United States. This is in contrast to Anthony Fauci stating that the “US may not see a second wave” and President Donald Trump insisting that “[the government] are not going to close the country” if there is a second wave

RBA Meeting Minutes and Australian unemployment rate – Tuesday 16th and Thursday 18th June.

With citizens experiencing a fairly non-restrictive Coronavirus period, Australia has had similar results to New Zealand without an extreme lockdown. However, with random Coronavirus cases popping up in sporadic places, with protests increasing the likelihood of the spread of the Coronavirus, it is not clear whether their method prevails. Futhermore, Australia plans to lift virus curbs by the end of July. Analysts expect a relatively coordinated speech at the RBA meeting minutes conference, backing the RBA’s decision to keep rates at 0.25%. Furthermore, analysts predict an increase in unemployment to 7%, from 6.2%.

Bank of Japan Interest Rate Decision – Tuesday 16th June  

With Tokyo reporting 47 new Coronavirus cases, Japan is preparing for a second wave of the Coronavirus. Facing pre-Coronavirus issues such as an aging population and slowing GDP alongside an increase in unemployment, analysts predict a change from -0.1% rate currently; however, uncertainty plagues the decision.

GBP Unemployment and Consumer Price Index – Tuesday 16th and Wednesday 17th June 

With one of the worst fatality rates in the world, the UK is likely to be struck in the next couple of months with regards to consumer spending and unemployment. Furthermore, Prime Minister Boris Johnson has been touting a 10% unemployment rate by Christmas rate not seen since the 1930s. CPI growth is set to fall to 0.5% from 0.8% as consumers restrict their spending due to the Coronavirus.

The second wave will likely dictate the course of the market in the next following weeks. Therefore, investors and traders should specifically be cautious on the upcoming US data in the week ahead, as flares up in Coronavirus cases have been slowly increasing.