June promises to be a very exciting time for the capital markets this year, as the two most important central banks in the world, the ECB and the Fed, have their meetings this week and next week, followed by a decision on interest rates. Admittedly: The ECB meeting is clearly more "unimportant" than the FED meeting. Because whatever the ECB says about inflation, experts are sure that even if it wanted to, it would not be able to raise interest rates. Too many euro states are too heavily indebted and are probably only still alive because interest rates are zero and debt thus causes bearable interest costs. If the ECB had thought interest rate hikes were possible, we would have seen them before the Corona pandemic. Now, in or after the pandemic, financial conditions have not improved at all. So the issue of raising interest rates or reducing bond purchases is even further away than it was before Covid-19.
In America, the situation is somewhat different. Here, the Fed had already moved the key interest rate towards two per cent before Corona. We do not expect the Fed to raise interest rates next Wednesday. The decisive factor will be how the Fed looks into the future. Will interest rate hikes and the so-called "tapering" - i.e. the shrinking of the balance sheet - come sooner than expected because of the good economic data? Most recently, 2023 was on the cards, but in view of the economic recovery, that hardly seems to be the case any more. It is a very exciting topic because it is fundamentally important for the equity and currency markets. We can say without exaggeration that 16.06.2021 could be one of the most important trading days of the year, because the FED has incredible power and can trigger a landslide or even a party on the stock markets with just a few sentences.
For this week, everything looks first to Thursday, when the US inflation figures and the weekly unemployment figures will be published alongside the ECB meeting. Other important news for this week are the US JOLTs jobs report, the interest rate decision from Canada and the OPEC monthly report.