Today, focus will remain on crude oil following the attacks in the Strait of Hormuz that happened yesterday. In a press conference, without providing any evidence, Mike Pompeo, the Secretary of State blamed Iran for the attacks. In a rejoinder, Iran blamed the United States for the attack. The foreign minister said that the US was seeking a reason to attack the country in the same way it did when it attacked Iraq. In the previous tanker attacks, Iran-supported Houthi rebels claimed responsibility for the attack. Today, investors will wait for a response from other countries in the Middle East.
Today, the Russian central bank will release its interest rates decision. The bank is expected to become the latest major central bank to cut rates. It will likely slash rates by 25 basis points from 7.75% to a low of 7.50%. The decision will come a week after the Australian central bank slashed rates by 25 basis points. Yesterday, the Swiss National Bank (SNB) left rates unchanged at -0.75%. The Fed has also been under pressure to lower interest rates as the trade war continues. The inflation data released this week coupled with the employment numbers released a week ago continue to make the case for a rate cut.
The United States will release the retail sales data for the month of May. The data is expected to show that the headline retail sales rose by a MoM rate of 0.7%, which will be above the previous decline of -0.7%. The core retail sales are expected to rise by 0.5%, which is higher than the previous increase of 0.1%. the retail control is expected to have risen by 0.4%, which is lower than the previous 1.1%. In addition to the retail sales, investors will receive the manufacturing production data for the month of May. This data will come from the Fed. Investors expect the manufacturing production to rise by 0.1% while the industrial production is expected to rise by 0.2%. The business inventories data is expected to rise by 0.4%.
Investors will also receive the oil rigs from Baker Hughes. The data is expected to show that the oil rig count increased to 792 from last week’s 789. The total rig count, which includes those of natural gas are expected to increase to 978. These numbers will come at a time when the US is seeing increased oil production as the driving season nears. This week, data from Energy Information Administration showed that inventories rose by more than 2 million barrels.
Today, investors received mixed economic data from China. The numbers showed that the industrial production rose by 5.0% in May, which was lower than the expected 5.4%. the fixed asset investment rose by 5.6%, lower than the expected 6.1%. on a positive note, the retail sales increased by 8.6%, which was higher than the expected 8.0%. The unemployment rate remained unchanged at 5.0%.