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LGT Navigator: Standstill ahead of central bank decisions

June 15, 2021

In the run-up to the interest rate decisions of the Fed, the SNB and the Bank of Japan, investor restraint on the capital markets is noticeable. Increased inflation expectations and the prospect of a further recovery of the global economy from the corona crisis could persuade central banks to make an earlier turnaround on interest rates. On Wall Street, standard stocks moved sideways, but the Nasdaq technology exchange managed a new record high. In Asia, the indices trended inconsistently, and Europe's stock markets are also likely to be more or less at a standstill until the Fed decision on Wednesday.

Standstill ahead of central bank decisions

The American stock markets started without a clear trend into the new week. The Dow Jones Industrial closed -0.25% lower at 34'393.75 points, while the S&P 500 gained a moderate +0.18% to 4'255.15 points. On the Nasdaq, however, the Nasdaq 100 selection index reached a new record high in the meantime and ended Monday's trading with a daily gain of +0.93% at 14'128.20 points. Before in the next few days the focus is fully on the monetary policy decisions of the central banks of the US, Switzerland and Japan, the capital markets today expect the latest inflation data from the euro core countries of Germany, France and Italy.

Euro economy and ECB policy on track

ECB President Christine Lagarde is confident about the economic development in the euro area but wants to maintain the highest possible flexibility regarding a possible termination of the PEPP pandemic purchase program. According to the central bank's current projections, the euro economy will return to its pre-Corona crisis level in the first quarter of 2022. According to Lagarde, however, this should not indicate a phase-out date for the PEPP. “We are moving in the right direction, but you should not take the crutches off a patient until the muscles have recovered enough for the patient to walk on his or her own legs,” the central bank chief said in an interview.

Industry in the eurozone sends a positive signal

In the euro area, industry remains on the road to recovery. According to the latest data from the Eurostat statistics office, industrial production rose more strongly than expected in April by +0.8% compared to the previous month. Analysts had expected only half as strong an increase. On an annual basis, a massive increase in production of almost 40% was measured due to the base effect of the corona-related slump in the same period of the previous year.

Economic Indicators June 15

MEZ Country Indicator Last period
08:00 GE Consumer Prices (May, y/y) +2.4%
08:00 UK Unemployment Rate (May) 4.8%
08:45 FR Consumer Prices (May, y/y) +1.8%
10:00 IT Consumer Prices (May, y/y) +1.3%
14:30 US Producer Prices (May, y/y) +6.2%
14:30 US Core Producer Prices (May, y/y) +4.1%
14:30 US Retail Sales (May, m/m) 0.0%
14:30 US NY Fed Empire State Manufacturing Index (June) +24.3
15:15 US Industrial Production (May, m/m) +0.5%
16:00 US NAHB Real Estate Index (June) 83.0


Earnings Calender June 15

Country Company Period
SWE H&M Q2 Sales
US Oracle Q4


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Source: LGT Bank (Switzerland) Ltd.

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