Bank of America (BofA) analysts predicted that June will be an “unforgettable” month with important decisions expected from many central banks.
This week has been a week full of surprises from central banks, with the Bank of Sweden (Riksbank) cutting interest rates and the Bank of England (BoE) expressing more confidence than previously expected that inflation will move in the desired direction.
“We got a glimpse of what June will look like for markets, when many central banks will make important decisions,” BofA analysts said. Analysts continued: “All together, we may be entering one of the most important months for markets in a long time, where key decisions will be made for many central banks. This could be a June to remember.”
Despite the BoE’s ‘structural’ dovish trend, BofA analysts still believe wage increases will be more stubborn. BofA said, “Our call for the first rate cut in August continues.”
Looking ahead, BofA said its focus in Europe will be on March UK labor market data due next week. They also expect the German ZEW indicator to continue improving in May and the first quarter GDP for the Eurozone to provide further insight into the evolution of growth across the region.
*This is not investment advice.