Economic calendar: US inflation reading in the spotlight

7:40 AM June 12, 2019

- CBRT may deliver more dovish message
- US CPI inflation expected to have slowed slightly in May
- Will DOE report confirm another major build signalled by API?

12:00 pm BST - CBRT rate decision. Turkish lira regained some ground against the euro and the US dollar during the past three weeks. Dovishness of the US and European monetary authorities can be named the cause. However, markets began to speculate that CBRT may follow into their footsteps and provide some easing, for example in the form of a rate cut. Let us recall that CBRT dropped hiking bias during the meeting in April, a move that paved the way for a cut. Nevertheless, market consensus sees rates remaining intact with the main one staying at 24%.

1:30 pm BST - US, CPI inflation for May. There is a lot of discussion on whether the Federal Reserve will slash rates in July or not. Markets are almost certain it will, given the latest lacklustre labour market reading. Deceleration in price growth could only reinforce such view and encourage Fed members to finally pull a trigger. Market expects a slow down from 2% YoY to 1.9% YoY when it comes to headline reading.

3:30 pm BST - DOE report on oil inventories. A lot of uncertainty surrounds the upcoming OPEC+ meeting. While markets are eager to know whether the output cut agreement will be extended onto the second half of the year , it is not yet known whether the group will meet at the end of June as planned earlier or at the beginning of July. Meanwhile, crude prices are being pressured by dismal API report released yesterday. In case such a major build is confirmed by today’s DOE print, oil price may look to test recent lows.

Central bankers’ speeches:
- 9:00 am BST - ECB’s Muller
- 9:15 am BST - ECB President Draghi
- 10:00 am BST - RBA’s Ellis
- 10:00 am BST - ECB Vice President Guindos
- 1:15 pm BST - ECB’s Coeure

WTI (OIL.WTI) moved lower following yesterday’s dismal API reading. Crude price eyes a retest of the demand zone ranging $51.20-52.00. A break below cannot be ruled out in case DOE report turns out to be a major disappointment. Source: xStation5

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