Monday Morning Meeting Notes (06/26/2023)

General Info:

• The Bank of England (BOE) voted to raise interest rates by 0.50%, bringing its official bank rate to 5.00%
• In each of its previous two policy meetings, the committee chose to raise rates by 0.25%, so the jump to a 0.50% raise was a surprise to market participants
• Earlier in the week, consumer price index (CPI) data for the U.K. showed that inflation rose in May and remains stubbornly high at 8.7% year-over-year
• Federal Reserve (Fed) Chair Jerome Powell noted at last week’s press conferences that the economy “has not so far reacted much to our existing rate hikes and so we’re going to have to keep at it”
• As we’ve said all along, we expected rates to remain higher for longer in order to fight inflation and now market participants are starting to come around to that realization
• Fun Fact: Japan has over 200 flavors of Kit-Kat candy bars. They're exclusively created for different regions, cities, and seasons. Examples include: banana, blueberry cheesecake, Oreo ice cream, baked potato, melon and cheese, and wasabi
• Why does Japan love Kit-Kats so much? In Japanese, the candy is pronounced “kitto katto,” which sounds similar to the phrase “kitto katsu,” which means “good luck”, so the country has popularized the candy as a sign of good luck
• For those that are curious, the melon and cheese flavor is cantaloupe and mascarpone

Monday 06/26:

• Taiwan industrial production

Tuesday 06/27:

• U.S. new home sales for May
• U.S. Conference Board consumer confidence for June

Wednesday 06/28:

• U.S. wholesale inventories for May
• The Fed will release the results of its annual banking industry stress test
• European Central Bank (ECB) holds a forum in Sintra, Portugal, including a monetary policy panel with ECB President Christine Lagarde, Fed Chair Jerome Powell, Bank of Japan (BOJ) Governor Kazuo Ueda, and BOE Governor Andrew Bailey

Thursday 06/29:

• Nike, Acuity Brands, and Rite Aid Corp report earnings
• U.S. initial jobless claims and continuing claims data
• Third reading of U.S. GDP for Q1 2023
• Eurozone economic confidence and consumer confidence for June
• Sweden’s Riksbank announces its monetary policy decision followed by a press conference with Governor Erik Thedeen

Friday 06/30:

• U.S. personal income and spending data for May, including personal consumption expenditures (PCE)
• PCE is expected to have increased 0.1% month-over-month and 3.8% year-over-year
• Core PCE, the Fed’s preferred inflation gauge, is expected to have increased 0.4% month-over-month and 4.7% year-over-year (year-over-year number remains the same as last month)
• U.S. University of Michigan consumer sentiment for June
• Eurozone CPI data for June
• Eurozone unemployment data for May
• China Manufacturing and Non-Manufacturing PMI data for June