Economic calendar: All eyes on FOMC

Summary:
- FOMC to announce rate decision at 7:00 pm BST
- Canadian inflation seen accelerating in May
- Oil stockpiles forecasted to drop by 1.1 million barrels

9:30 am BST - UK, CPI inflation for May. Tory leadership race continues to dominate the UK news flow and, in turn, GBP trading. However, traders will be offered a CPI reading for May today and it should watched with double attention as the Bank of England is set to announce its rate decision tomorrow. Market consensus headline measure to decelerate from 2.1% YoY to 2% YoY. The core gauge should show a slowdown from 1.8% YoY to 1.6% YoY.

1:30 pm BST - Canada, CPI inflation for May. Canada saw somewhat mixed data as of late with manufacturing sector prints disappointing and labour market report showing solid growth of full-time jobs. Inflation has been picking up as of late and market consensus expects the headline CPI gauge to reach 2.2% YoY in May. However, one should keep in mind that next BoC move may depend on what will the Fed do tonight.

3:30 pm BST - DOE report on oil inventories. The API report released yesterday finally showed a drop in oil inventories. It was smaller than the market expected and oil move slightly lower afterwards. However, oil is trading slightly higher on Wednesday morning as the OPEC+ group is said to be close to agreeing on holding the meeting at the beginning of July. Nevertheless, in case DOE report shows solid build those gains may quickly evaporate. Market consensus expects a 1.1 million barrel decline.

7:00 pm BST - FOMC interest rate decision. The time has come for the key event of the week. Investors may finally get an answer whether recent deterioration in the US data will cause the Federal Reserve to slash rates. Market is almost certain that the US central bank will deliver a rate cut next month. The question remains whether there will be more and the dot chart that will be released today may provide an answer. Chairman Powell will begin press conference 30 minutes after the decision announcement (7:30 pm BST).

Central bankers’ speeches:
- 11:00 am BST - Riksbank’s Jansson
- 3:00 pm BST - ECB President Draghi (closing remarks at Sintra forum)

USDCAD moved higher over the past two weeks as the USD strengthened significantly. The pair halted advance at the combination of the 50-session moving average (green line) and the 61.8% Fibo level of the March’s downward move. USDCAD pulled back to the support zone ranging 1.3375-1.3390 later on and is now awaiting FOMC decision. Source: xStation5

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