Fed Reserve monetary policy meeting, US figures dominate market interest

June 14, 2017

A busy night for markets with the US central bank meeting to discuss monetary policy in the early hours of tomorrow morning, while the US is also releasing some significant market data.

During the early hours of tomorrow morning, the US Fed Reserve meets to discuss monetary policy settings for the country. There has not been a lot of talk of any change to current interest rates, despite a lot of talk at the beginning of the year that June would likely be one of the months in which interest rates would be tightened. However, with political events panning out the way they have in the first half of the year, including the possible impeachment of the President, there has been a lot of uncertainty in markets. This uncertainty may mean the central bank errs on the side of caution.

The US also has a number of significant figures set for release later tonight. These figures include: CPI & Core CPI, Retail & Core Retail Sales and Business Inventories. The critical economic figures are the CPI and Retail Sales data. CPI reflects inflation within the economy. This is important as inflation is generally tied to demand for products and services within the economy. As demand increases supply must increase. If supply cannot keep up with demand, it is natural to increase prices to try and stem demand. This is where inflation occurs. Retail Sales are vital as the retail sector is such an important part of the economy. Much of consumers’ disposable income would be spent in this sector, therefore a strong retail figure would more or less mean that consumers are spending money.

Elsewhere around the world, Europe is publishing German Final CPI, European Employment Change and European Industrial Production data. The UK is releasing Average Earnings Index, Claimant Count Change and CB Leading Index figures and Japan is reporting Revised Industrial Production data.