Yahoo Finanza Inflation Data Will Be a Hot Topic This Week; Which Nations Are Due to Release Their Latest Figures?
From Canada, Japan, the US, Australia and across Europe among others, prices have been high since the pandemic wreaked havoc.
Many of the biggest Central Banks have been busy making borrowing rates tighter for over a year now, and inflation has finally started to shift in the right direction for much of the world that was previously struggling to get it under control.
Sure, inflation is lower than it was a year ago, but many consumers aren’t fully aware of what that really means. It’s important to bear in mind that inflation is a metric that gauges the pace at which prices are increasing (or decreasing). Despite an expected slowdown in the rate from its peak over the past year, prices are continuing to increase, albeit at a slower pace just lately.
According to economists, the deceleration of inflation rates will not result in immediate alleviation for consumers due to the persistence of elevated prices in some areas, such as the service industry. There is a prevalent belief that the price level in many industries has undergone a permanent alteration, and unless there is a matching increase in wages to offset inflation, the adverse effects for consumers will hang around for a while to come.
Let’s take a brief look at what to expect for the next week, and which countries are having the most success with keeping prices under control.
Canada
Above market expectations of 4.1%, Canada’s annual inflation rate jumped to 4.4% in April, up from a 19-month low of 4.3% the previous month. When the most recent data is released at 12:30 PM GMT on Tuesday, economists predict that the rate of inflation for May will decrease to 3.4% year over year.
Core inflation, which will also be released at the same time, is forecast to have decreased marginally from 4.1% to 3.9% year over year.
This release comes on the heels of the Bank of Canada raising interest rates even higher in early June, after two consecutive decisions to keep the policy rate unchanged. The bank in its deliberations suggested that the increase was supported by “surprisingly resilient” consumer spending, which, according to the most recent retail statistics, shows little signs of weakening.
Australia
In April, the new monthly CPI index for Australia increased to 6.8% year-over-year, which was up from 6.3% in March and the lowest level in the last 10 months. The annual inflation rate increased for the first time since December of last year due to an increase in the cost of transportation; however, when the most recent statistic is published at 1:30 AM GMT on Wednesday, it is anticipated that there will be a little improvement back to 6.1%.
As inflation remains high above the 2% target, and wage growth has remained tight, the Reserve Bank of Australia hiked the cash rate by 25 basis points in June, bringing it to 4.1%. The board also left the door open for additional tightening but acknowledges there are considerable lags in policy yet to unfold.
European Union
Italy’s annual inflation rate dropped to 7.6% in May from 8.2% in April and was the same as March’s one year low. When the latest reading is due at 9:00 AM GMT on Wednesday, analysts see the rate falling further to around 6.8%.
Annual consumer price inflation in Spain was verified at 3.2% in May, the lowest since July 2021, and down from 4.1% the previous month. Preliminary data released at 7:00 AM GMT Thursday is expected to show that Spain has almost hit the target rate of 2%, with a number sitting somewhere just above at around 2.5% for June.
Germany’s annual inflation, due at 12:00 PM GMT Thursday, dropped to 6.1% in May from 7.2% in April, the lowest level in 14 months. Preliminary data is expected to show a further decline in the rate to 6.3% for June.
Inflation in France’s consumer prices fell to 5.1% from 5.2% in April, as the costs of fuel, groceries, and industrial output all leveled out. If forecasts are correct, the Preliminary figures, published at 6:45 AM GMT on Friday, will show a drop to 4.6%.
The Euro Area’s consumer price inflation was confirmed in May at 6.1%, which was the lowest level since February 2022. A drop to 5.6% is expected when the Flash figures are due at 9:00 AM GMT Friday. While Core Inflation, released at the same time, is hoped to have cooled to 5.1% from 5.3% also for June.
At its June meeting, the European Central Bank hiked interest rates by 25 basis points, raising the rate on primary refinancing operations to 4%, the highest level since 2008, while the rate on the deposit facility rose to 3.5%, the highest level in 22 years. Despite the EU entering a recession at the beginning of this year, this represented the eighth straight rate rise, with likely more to come.
United States
Prices for personal consumption items in the US increased more than anticipated in April, supporting wagers that the Federal Reserve would stick to its hawkish position and keep interest rates high for an extended length of time.
In April, Core PCE, which excludes food and energy, rose 0.4% month over month, above the market’s forecast.. New data due at 12:30 PM GMT Friday is expected to show further growth of 0.4% for May.
This month, the Federal Reserve opted to maintain the Fed funds’ rate target at a range of 5%-5.25% after CPI figures released the day prior showed that overall inflation was down to 4%. However, the board indicated that if the economy and inflation don’t cool more as they expected then rates may be raised by up to 5.6% by the end of the year.
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This article was originally posted on FX Empire
