Key Events This Holiday-Shortened Week: FOMC, Retail Sales, G7, Middle East War

Just one week ago, it was all about US/China but that seems a long time ago now as 2025 continues to throw up new things for us to think about. Indeed, as DB’s Jim Reid writes, after the events of the last 3-4 days, events in the Middle East will overshadow the FOMC meeting on Wednesday which would have been the highlight in a week of several central bank meetings. 

A quick look at where we stand first: Israel and Iran have continued to exchange strikes over the weekend. Israel has attacked Iran’s energy infrastructure, including oil storage as well as a plant at its largest gas field, but so far has shied away from targeting oil production and shipping facilities. While both sides have traded retaliatory blows, they have so far avoided the most extreme escalatory steps. In Iran’s case, they have so far avoided targeting US facilities in the region, which would very likely trigger direct US involvement. Reuters reported that Trump discouraged Israel from trying to kill Iran’s Supreme Leader Ayatollah Ali Khamenei when an opportunity presented itself. So diplomacy may be on a knife-edge in the region.

Outside of the Middle East, geopolitics will continue to be in the spotlight with the G7 Leader’s Summit in Canada that started yesterday through to tomorrow. Any headlines from trade in this meeting will also be of note but progress doesn’t look likely from seeing the headlines going into the summit. The meeting also takes place ahead of the NATO summit on June 24-25. So a lot bubbling up and next week will be fascinating to see how the US operates in terms of pressure on its fellow NATO members and what European countries commit to. 

Ahead of that, the FOMC will attract the most attention this week outside of events in the Middle East. As is widely expected, the Fed will remain on hold and maintain their existing biases in the statement, the Summary of Economic Projections (SEP) and Chair Powell’s press conference. Having said that, the SEP will likely show weaker growth, higher inflation, and could show a softer labour market. With these adjustments, their baseline is that the median dot only shows one rate cut this year, though they admit it is a close call between that and the existing two. Beyond 2025 they expect only modest adjustments to the SEP, with the 2026 median fed funds rate moving 25bps higher, in part supported by a small increase in the long-run dot.

Powell’s press conference is likely to emphasize uncertainty and a wait and see approach. The recent spike in oil will just add to all of this even if recent inflation data has been better than expected. Future price increases from tariffs loom in the background even if their initial impact has taken a bit longer to show up than expected. So it’s a meeting where we could learn very little, partly as the Fed really don’t know which way the world is evolving and feeling that they have flexibility at current policy settings.

Prior to that, the BoJ meeting arrives tomorrow where consensus is for rates to be maintained. There’s also the interim assessment of the JGB purchase plan to look forward to. Here, too, economists expect no change to the schedule up to Q1 2026 and then to be reduced thereafter. Indicatively, DB still expects a July rate hike but there are a number of conditions they go through in the note for that to materialise. 

Then the BoE round outs the G7 policy meetings for the week on Thursday. DB’s UK economist sees the Bank Rate staying unchanged at 4.25% and expects the MPC to open the door to an August rate cut. There will be other European central bank policy meeting this week, Sweden’s Riksbank on Wednesday, and Norway’s Norges bank and Switzerland’s SNB on Thursday. The SNB are expected to cut rates back down to zero which will be a landmark moment after three years of positive rates following 7-8 years of negative rates. There is some risk that they cut into negative rate territory. 

In terms of the rest of the week the day-by-day calendar is at the end as usual but the main highlights are; the US Empire manufacturing index and a 20yr UST auction today; US retail sales, a US holiday (Juneteenth) on Thursday; and the US Phili Fed, industrial production and Germany’s ZEW tomorrow; US housing starts/permits, jobless claims and UK inflation on Wednesday; UK retail sales, Japanese CPI, German PPI and French retail sales on Friday. 

Courtesy of DB, here is a day-by-day calendar of events

Monday June 16

• Data: US June Empire manufacturing index, China May home prices, retail sales, industrial production, property investment, Italy April general government debt, Eurozone Q1 labour costs, Canada May housing starts, existing home sales
• Central banks: ECB’s Nagel and Cipollone speak
• Auctions: US 20-year Bond (reopening, $13bn)

Tuesday June 17

• Data: US May retail sales, industrial production, capacity utilisation, import price index, export price index, June NAHB housing market index, New York Fed services business activity, April business inventories, Germany June ZEW survey, Eurozone June ZEW survey, Canada April international securities transactions
• Central banks: BoJ decision, ECB’s Villeroy and Centeno speak
• Auctions: US 5-year TIPS (reopening, $23bn)

Wednesday June 18

• Data: US May building permits, housing starts, April total net TIC flows, initial jobless claims, UK May CPI, RPI, April house price index, Japan May trade balance, April core machine orders, Italy April current account balance, ECB April current account, New Zealand Q1 GDP
• Central banks: Fed, Riksbank decision, ECB’s Elderson, Escriva, Villeroy, Knot, Panetta, Nagel, Centeno and Lane speak

Thursday June 19

• Data: Eurozone April construction output, Australia May labour force survey
• Central banks: BoE, Norges, SNB decision, ECB’s President Lagarde, Villeroy, Nagel and Guindos speak
• Other: Juneteenth federal holiday in the US

Friday June 20

• Data: US June Philadelphia Fed business outlook, May leading index, China 1-yr and 5-yr loan prime rates, UK June GfK consumer confidence, May retail sales, public finances, Japan May national CPI, Germany May PPI, France June business confidence, May retail sales, Eurozone June consumer confidence, May M3, Canada April retail sales, May industrial product price index
• Central banks: ECB publishes its economic bulletin, BoJ’s Governor Ueda speaks

* * * 

Finally, looking at just the US, Goldman writes that the key economic data releases this week are the retail sales and import prices reports on Tuesday. The June FOMC meeting is on Wednesday. The post-meeting statement will be released at 2:00 PM ET, followed by Chair Powell’s press conference at 2:30 PM. 

Monday, June 16 

• 08:30 AM Empire State manufacturing survey, June (-16.0; consensus -6.3, last -9.2)

Tuesday, June 17 

• 08:30 AM Retail sales, May (GS -0.7%, consensus -0.6%, last +0.1%); Retail sales ex-auto, May (GS +0.2%, consensus +0.3%, last +0.2%); Retail sales ex-auto & gas, May (GS +0.2%, consensus +0.2%, last +0.1%); Core retail sales, May (GS +0.2%, consensus +0.3%, last -0.2%): We estimate core retail sales rebounded 0.2% in May (ex-autos, gasoline, and building materials; month-over-month SA) based on the signal from measures of card spending. We estimate headline retail sales declined 0.7%, reflecting sharply lower auto sales.
• 08:30 AM Import price index, May (GS -0.3%, consensus -0.2%, last +0.1%): We estimate that import prices declined 0.3% in May, reflecting a decline in oil prices and potential payback for a sharp 0.4% increase in core import prices in April that more than offset a weaker dollar and a boost from seasonality (import prices are reported on a not-seasonally adjusted basis). This month’s report could offer an early signal about the extent to which international producers are bearing the cost of tariffs. US import price data are reported exclusive of customs duties. That means that, for example, unchanged import prices would suggest that the incidence of tariffs is falling fully on US consumers and businesses, all else equal. Early foreign export price data suggest that exporters to the US could be absorbing some of the costs of tariffs by lowering their prices.
• 09:15 AM Industrial production, May (GS +0.1%, consensus flat, last flat); Manufacturing production, May (GS +0.2%, consensus +0.1%, last -0.4%); Capacity utilization, May (GS 77.8%, consensus 77.7%, last 77.7%): We estimate industrial production increased 0.1%, as strong natural gas and mining production outweigh weak electricity production. We estimate capacity utilization increased to 77.8%.
• 10:00 AM Business inventories, April (consensus flat, last +0.1%)
• 10:00 AM NAHB housing market index, June (consensus 36, last 34)

Wednesday, June 18 

• 8:30 AM Housing starts, May (GS -1.0%, consensus -0.2%, last +1.6%); Building permits, May (consensus +0.2%, last -4.0%); 
• 08:30 AM Initial jobless claims, week ended June 14 (GS 250k, consensus 245k, last 248k); Continuing jobless claims, week ended June 7 (consensus 1,925k, last 1,956k)
• 02:00 PM FOMC statement, June 17–18 meeting: We expect the FOMC to reiterate that it plans to remain on hold until it has further clarity about policy changes and the economic outlook. Participants’ tariff assumptions will have risen since March, but in light of the recent trade de-escalation and soft inflation news, we suspect they will make cautious tariff assumptions and avoid bold changes to their forecasts. We expect the median projection for 2025 to show slightly higher 3.0% inflation, slightly lower 1.5% GDP growth, and a slightly higher 4.5% unemployment rate. We expect the median dots to be unchanged, with two cuts to 3.875% in 2025, two cuts to 3.375% in 2026, one cut to 3.125% in 2027, and a 3% neutral rate.

Thursday, June 19 

• Juneteenth National Independence Day. NYSE will be closed. SIFMA recommends bond markets also remain closed.

Friday, June 20 

• 08:30 AM Philadelphia Fed manufacturing index, June (GS flat, consensus -1.0, last -4.0)

Source: DB. Goldman