Lower-than-expected inflation data has increased hopes of a potential reprieve from anticipated ECB interest rate hikes in Europe. The United States has finally witnessed progress in the ongoing debt ceiling drama, as legislation passed in the House and is likely to be approved in the Senate. Also this week, the US oil market fell over 5% at the time of writing, influenced by a stronger USD and a dimmer growth outlook from China. However, the upcoming OPEC+ meeting adds further speculation about potential measures to boost oil prices.

Other key events from the past week

• EUR: Inflation peak? May 31: A string of European inflation data came in lower than expected this week prompting some to hope the ECB may not need to hike rates as high as expected. Will expectations fall for higher ECB interest rates?
• USD: Debt ceiling drama, June 1: Debt ceiling drama progressed this week with the US House passing the legislation by a vote of 314-117. The Senate is virtually certain to pass the deal now, as long as time does not run out.
• US oil: European stocks sink, May 24: US oil fell into daily support in the $67-68 region. The main drivers for the falls are a stronger USD and a weaker growth outlook from China, but will OPEC+ help lift prices when it meets on June 4?

Key events for the coming week

• AUD: RBA interest rate, June 6: Short-term interest rate markets, at the time of writing, are pricing in a 65% chance of no rate change from the RBA. Watch the AUDNZD for volatility in case the RBA surprises again with a hike.
• Seasonal Insights: Will Amazon uphold its amazing seasonal trend?
• CAD: BoC Interest rate, June 7: Like the last interest rate decision, short-term interest rate markets expect no change in rate from the BoC. The last inflation print on May 16 was higher than the markets were expecting at 4.4% y/y vs 4.1% expected. Will the BoC still feel it can keep rates on hold for a 4th time?

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