Next Week’s Market Preview: US CPI Along with Two Major Central Bank Decisions to Take Center Stage, SpaceX’s Biggest IPO in History to Arrive

This week, due to US non-farm payroll data coming in far above expectations, market expectations for the Fed to raise rates this year surged rapidly. Spot gold fell for 4 consecutive weeks, nearly wiping out all gains this year; silver also closed down by nearly 10%;

Although the US Dollar Index rose strongly this week and even briefly stood above the 100 mark, non-USD currencies were collectively under pressure. Among them, the Japanese yen performed the weakest— the USD/JPY exchange rate repeatedly tested the 160 integer level.

Not only that, US tech stocks took a big hit on Friday. The Nasdaq index fell 4.18%, recording its largest single-day drop since April; the Philadelphia Semiconductor Index saw more than $1 trillion evaporate in a single day.

Entering next week, the market will face a triple shock of “data + central banks + IPO.” Among them, this month’s FOMC rate-setting meeting is undoubtedly the top priority, and it is also the debut of the newly appointed Fed Chair, Waller.

At present, the market is highly focused on three key signals. First, whether the language indicating a “rate-cut bias” will be removed; second, whether the dot plot will move up overall; third, whether risk weights will shift from “fearing recession” to “fearing inflation.”

Even if this meeting decides not to raise rates this time, markets widely expect the Fed to deliver strong hawkish signals— and it may even move forward with balance sheet reduction and reforms to communication mechanisms.

Meanwhile, the European Central Bank is expected to announce its first rate hike since September 2023 next Thursday, and will officially acknowledge that inflation has worsened. The Bank of Canada, constrained by weak employment and trade uncertainty, is expected to choose to keep rates unchanged on Wednesday.

On the data front, CPI to be released next Wednesday and PPI on Thursday are also equally crucial. Markets expect nominal CPI year over year to rise to 4.2%, core CPI to rise to 3%, and PPI year over year to possibly surge to above 6.5%. If the data exceeds expectations, it will further weigh on gold prices.

Beyond macro events, SpaceX’s IPO is expected to start next week, which may significantly affect market sentiment. Meanwhile, the two tech giants Oracle and Adobe will release their earnings reports on June 10 and June 11, respectively, and the performance of their AI cloud business will be a key highlight.

In summary, the market is rapidly switching from “easing trading” to “tightening pricing.” Gold, US Treasuries, and US tech stocks are all facing directional tests, and next week is very likely to be the key week for determining the short-term trend.

#CPI #SpaceX