US Retail Sales Data, FOMC and Bank of England Meetings: Macro Week Ahead
US Retail Sales Data, FOMC and Bank of England Meetings: Macro Week Ahead
By:Ilya Spivak
The Federal Reserve is back in focus for the markets after Israel strikes Iran, spooking traders
- US retail sales data eyed to see if consumers have shrugged off tariff fears.
- All eyes on forward guidance from the Fed as interest rates remain on hold.
- The Bank of England is seen pausing rate cuts despite cooling CPI inflation.
Financial markets were deeply skewed by sharp moves in the final 24 hours of trade as Israel launched a strike against Iran, targeting assets and personnel linked its nuclear program. Crude oil prices spiked higher, stocks fell, and haven-seeking capital flows buoyed Treasury bonds and gold.
Curiously, the US dollar struggled to assert its typical liquidity haven role in times of geopolitical volatility. It finished the week down 1.8% against the euro and 1.6% weaker against the Japanese yen. That’s after US CPI and PPI inflation data produced benign results, stoking Fed interest rate cut speculation.
Against this backdrop, here are the key macro waypoints to consider in the days ahead.
US retail sales data
Sales at US retailers are expected to have fallen 0.7% in May, marking the worst result in four months. Traders will be keen observers of the data after consumption slowed to the weakest in nearly two years in the first quarter. This is the largest component of overall growth, at close to 68.5% of gross domestic product (GDP).
US consumer confidence has brightened since bottoming in April, according to the latest survey from the University of Michigan (UofM) published last week. It showed one-year inflation expectations fell from 6.6% in May’s survey back to 5.1%, pointing to easing tariff-related jitters. If sales turn up soggy all the same, that might worry the markets.
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Federal Open Market Committee (FOMC) meeting
The US central bank is widely expected to keep its interest target range unchanged at its current 4.25-4.50% setting when the policy-steering FOMC committee meets this week. That will put the spotlight on the statement issued after the conclave, an updated Summary of Economic Projections (SEP), and a press conference with Chair Jerome Powell.
Fed officials called for 50 basis points (bps) in rate cuts this year and in 2026 in December and reiterated the view in March. Benchmark Fed Funds futures show markets are in broad agreement, although traders are a bit skewed toward a late start in 2025, where 42bps are priced in, followed by a bit of catch-up next year with 57bps on the menu.
Bank of England (BOE) meeting and UK CPI data
The UK central bank is expected to pause in June after cutting its target interest rate to 4.25% in May. The anticipated voting breakdown on the nine-member Monetary Policy Committee (MPC) is expected to produce a 7-2 majority in favor of a hold, inverting last month’s tally approving a 25bps reduction.
Earlier in the week, UK consumer price index (CPI) data is expected to show that inflation slowed in May, with a rise of 3.4% year-on-year marking a downtick from the 15-month high at 3.5% recorded in April. The core rate excluding volatile food and energy prices is seen coming down to 3.6% from 3.8%.
Ilya Spivak, tastylive head of global macro, has 15 years of experience in trading strategy, and he specializes in identifying thematic moves in currencies, commodities, interest rates and equities. He hosts #Macro Money and co-hosts Overtime, Monday-Thursday. @Ilyaspivak
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