A series of key economic data releases are anticipated in the coming week, in addition to central bank meetings in the eurozone and Canada.
This week's global PMI data releases reflected robust economic recovery in May, though price pressures continued to build. Official data in many parts of the world confirmed this uptick in prices in April, but it will be of interest to watch how May's numbers would fare for the likes of US and China next week. One would recall that China's factory gate inflation surprised on the upside to rise at the fastest rate in three-and-a-half-years in April. Given the strong Caixin PMI price indications, elevated readings should not be ruled out.
That said, the market's concerns with regards to higher prices appear to have somewhat abated of late, but amid the current trend, there had also been some hesitancy to take on more risk. Next week's European Central Bank (ECB) meeting will be one watched with keen interest on how central bankers will weigh the risks for a region that is gathering momentum with reopening underway. No changes to monetary policy are expected, but tapering talks are not entirely off the table. This also comes ahead of the Fed June 15-16 meeting for a committee that had also ventured into the will-they-won't-they territory on tapering.
Finally, the G7 summit will be a multilateral event to watch as developed country leaders discuss the recovery from the pandemic, among others.
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