Introduction to the Week Ahead
With three major central bank rate decisions now behind us, markets will shift their attention even more closely to the rising geopolitical uncertainty in the Middle East, and the potential upward pressures this could place on energy prices, particularly oil. That said, economic data will be plentiful, and with Micron earnings scheduled this week as well, attention is likely to return somewhat to the AI trade. So, despite entering the final week of June, there should be plenty of news to keep an eye on.
Global PMI Surveys
Monday 23 June
Despite a rocky start to 2025, the global economy has held together, and while the PMI data so far hasn’t been stellar, it hasn’t been a disaster either. At the same time, if upcoming data shows that the US economy isn’t deteriorating as much as investors expected following the tariff announcements, the GBP/USD pair could continue to trend lower.
More recently, GBP/USD has broken below a rising channel, and is now testing technical support at 1.344. Additionally, the relative strength index (RSI) has recently turned lower, breaking its own uptrend. This suggests GBP/USD may continue to decline (meaning the dollar strengthens against the pound). While this is unlikely to be catastrophic, it could mean sterling weakens to around 1.308 against the dollar, which would coincide with the 38.2% retracement of the rally from the mid-January lows.
Technical Analysis of GBP/USD
GBP/USD, Mar 2020 – present, has been showcasing a decline in its value, indicating that the pound might continue to weaken against the dollar. This trend, combined with the technical support levels, suggests a potential further decline in the pound’s value.
Micron Earnings
Wednesday 25 June
For its fiscal third quarter, the US semiconductor company is expected to report that earnings more than doubled to $1.59 per share, from just $0.62 a year ago. Revenue is projected to have increased by 30% to $8.85bn, up from $6.81bn. Investors closely watch gross margins, which are anticipated to slip sequentially to 36.65%, down from 37.91%.
Micron is expected to guide Q4 earnings to $1.98 per share, on revenue of $9.8bn, with margins expected to improve to around 39%. The stock is expected to rise or fall by approximately 8.5% following the release of the results. Given a nearly 23% gain in May and 30% jump so far in June, it would be no surprise to learn that options positioning for the stock is very bullish, reflecting high expectations for strong results.
Technical Analysis of Micron
Technically, a gap needs to be filled at $127, with strong resistance extending up to $137. Conversely, should Micron shares decline, support exists at $114, with additional technical support from a gap at $103.50. The shares are extremely overbought at this stage, and given the substantial rally leading into the results, it would not be surprising to see the stock slip following the earnings announcement.
US PCE
Friday 27 June
Core personal consumption expenditure (PCE) is expected to be soft again in May, rising by just 0.1% month-on-month, in line with April’s reading. However, this is likely to be one of the last soft PCE readings for some time, especially if the US Federal Reserve’s projection for core PCE to rise back to 3.1% year-on-year by December proves accurate, as indicated in its latest Summary of Economic Projections.
If inflation concerns resurface – particularly if May data comes in hotter than expected – one indicator to watch closely is gold. The precious metal has been trending upwards for some time within a rising channel, accompanied by an RSI that is also trending higher. Having failed three times to break above $3,400, gold could breach this level on its fourth attempt.
Technical Analysis of Gold
Gold, Oct 2024 – present, has been showcasing an upward trend, indicating a potential breach of the $3,400 level. This, combined with the RSI trending higher, suggests that gold might continue its upward trajectory.
Economic and Company Events Calendar
Major upcoming economic announcements and scheduled US and UK company reports include:
Monday 23 June
- Australia: Manufacturing PMI (June), services PMI (June)
- Eurozone: Manufacturing PMI (June), services PMI (June) European Central Bank – President Lagarde speech
- UK: Manufacturing PMI (June), services PMI (June)
- US: Manufacturing PMI (June), services PMI (June)
- Results: Factset Research Systems (Q3)
Tuesday 24 June
- Canada: Consumer price index (May)
- Germany: IFO business climate (June)
- New Zealand: Trade balance (May)
- UK: Bank of England – Governor Bailey speech
- US: Consumer confidence (June), Federal Reserve – Chair Powell testifies
- Results: Babcock International (FY), Carnival Corp (Q2) , FedEx (Q4), Telecom Plus (FY)
Wednesday 25 June
- Australia: Consumer price index (May)
- Spain: GDP (Q1)
- US: EIA/DOE petroleum status report (weekly), Federal Reserve – Chair Powell testifies, new home sales (May)
- Results: General Mills (Q4), Jeffries (Q2), Micron Technology (Q3), Paychex (Q4)
Thursday 26 June
- Germany: Consumer confidence (July)
- Japan: Consumer price index (June), unemployment rate (May)
- UK: Bank of England – Governor Bailey speech
- US: EIADOE natural gas storage report (weekly), durable goods orders (May), GDP (Q1), pending home sales (May), trade balance (May)
- Results: Acuity (Q3), McCormick (Q2), Moonpig (FY), Nike (Q4), Walgreens Boots Alliance (Q3)
Friday 27 June
- Eurozone: Business climate (June), consumer confidence (June)
- UK: GDP (Q1)
- US: Michigan consumer sentiment (June), personal consumption expenditures index (May), personal income (May, personal spending (May)
- Results: No major announcements
Conclusion
In conclusion, the final week of June promises to be filled with significant economic data releases and company earnings reports. The geopolitical uncertainty in the Middle East and its potential impact on energy prices, particularly oil, will also be closely watched. As investors navigate through this complex landscape, it is essential to stay informed and adapt to the changing market conditions. By keeping a close eye on the key events and releases outlined above, investors can make more informed decisions and stay ahead of the curve in these uncertain times.
