This Week: UK100 crosses back above 50-period SMA ahead of this week’s UK data dump

Of all the major European indices, the UK100 index is the sole stock index which retains its quarter-to-date gains, currently exceeding 3%.
 

Those gains could be under threat, given this week’s events which feature the UK data dump, as well as the latest policy signals out of the Bank of England.

The one-week implied volatility for the UK100 has already risen 20% so far this month - which means bigger trading opportunities from the larger price swings expected in the days ahead.

Also note that the UK100 might take its cues from the British Pound, with both having an inverse relationship.

Events Watchlist:
 

• Wednesday, June 19: UK May consumer price index (CPI)

Economists predict that the UK’s CPI, which measures inflation may have cooled down in May 2024 compared to May 2023 (year-on-year).

If so, the UK100 may push higher on hopes that softer inflation might allow the Bank of England to cut interest rates sooner rather than later, though Thursday’s meeting might still be too soon.
 

• Thursday, June 20: Bank of England (BOE) rate decision

To be clear, the BOE is widely expected to keep its bank rate untouched at 5.25% this week. However, it’s a coin toss (50-50 chance) whether a rate cut will arrive at its next policy decision due August 1st.

If the BOE signals that it can begin easing rates by then, that could weaken GBP while boosting UK100 back towards the 8300 mark.
 

• Friday, June 21: UK May retail sales; June PMIs and consumer confidence

These datapoints will speak to the health of the UK economy. Stronger-than-expected data may delay the BOE’s rate cuts, especially if accompanied by higher-than-expected inflation earlier in the week.

Such prospects may push GBP higher and dragging UK100 closer to the 8k mark, further eroding the latter’s quarter-to-date gains.

Here’s a comprehensive list of other key economic data and events due this week:
 

Monday, June 17

• CN50 index: PBoC rate decision; China May retail sales, industrial production, property prices, unemployment
   
• US30 index: Speech by Philadelphia Fed President Patrick Harker; US June Empire manufacturing
   

Tuesday, June 18

• AUD: RBA rate decision
   
• EUR: Germany June ZEW survey expectations; Eurozone May CPI (final)
   
• US300 index: US May retail sales, industrial production
   
• USD index: Speeches by Richmond Fed President Thomas Barkin, Dallas Fed President Lorie Logan, Fed Governor Adriana Kugler, St. Louis Fed President Alberto Musalem, Chicago Fed President Austan Goolsbee
   

Wednesday, June 19

• JPY: Japan May trade balance; BoJ meeting minutes
   
• UK100 index: UK May CPI, RPI, PPI
   
• US markets closed
   

Thursday, June 20

• NZD: New Zealand 1Q GDP
   
• CNH: China loan prime rates
   
• EU50 index: Eurozone June consumer confidence
   
• CHF: SNB rate decision
   
• NOK: Norges Bank rate decision
   
• GBP: Bank of England rate decision
   
• USD: US weekly initial jobless claims
   

Friday, June 21

• JP225 index: Japan May national CPI; June PMIs
   
• EUR: Eurozone June PMIs
   
• UK100 index: UK May retail sales; June PMIs and consumer confidence
   
• US30 index: US June PMIs; speech by Richmond Fed President Thomas Barkin
   
• CAD: Canada April retail sales