Place this Wednesday at 8 p.m., in the minutes (or “minutes”) of the last monetary policy meeting of the American Federal Reserve of June 15. That day, the institution announced the 0.75% increase in the rate FedFunds, main instrument of monetary policy, within a range of 1.50% to 1.75%. This increase, stronger than that of 0.5% initially anticipated, had been decided at the last minute, in reaction to the announcement a few days earlier of a stronger than expected inflation figure. It illustrates ” the nervousness of the central bank in the face of an inflation shock whose magnitude and persistence astonishes everyonesummarizes the research office Oddo BHF. Since the meeting, all of Powell’s speeches have only confirmed the priority of fighting inflation and increase the likelihood of a hard-landing. This scenario would mean that the monetary tightening announced did not have a sufficient impact to limit the surge in prices, and could take the form of a further 75 basis point increase in key rates in July.
Services PMIs begin to decline
These monetary decisions weigh on consumer demand, and ultimately on the ISM index, which traces the expectations of purchasing managers. In the services sector, the indicator, published at 4 p.m., should register, in June, slowing down to 54 points, against 55.9 in May. This level is certainly above the 50 point mark which marks an expansion of activity, but it has not been reached since May 2020, i.e. at the end of confinements around the world. This decline reflects the prevailing economic uncertainty, both for businesses and households.
Also in the United States, in the absence of the report on employment in the private sector published by ADP (Automatic Data Processing) suspended this month for a change in methodology, investors will be satisfied with that of the Bureau of Labor Statistics (JOLTS). The job offers are expected to drop from 11.4 million to 11.1 million between April and May.
In the euro zone, retail sales of goods, a central indicator of consumer spending, are expected to increase by 0.4% over one month in May (-1.3% the month before). In the short term, however, demand tends to shift towards services. On the other hand, the industrial orders in Germany should continue their decline of 0.5% over one month, in May (-2.7% in April), even if the reopening of China limits the damage.
On the values front, the poultry champion CDL will publish its revenue for the first quarter of its staggered 2022-2023 financial year. The group, which notably owns the Le Gaulois, Maître Coq and Marie brands, withstood the surge in cereal prices (wheat, soybeans, corn), but was anticipating, for the start of the financial year, a fall in volumes which logically affect its sales.
RG