Multiple central banks are set to announce policy decisions this week, with the Bank of Japan (BoJ) expected to resume policy normalisation on Tuesday with an 89% chance of raising rates by 25bps to 1.00%. According to Investing.com, the BoJ delivered a hawkish hold at its April meeting, keeping the policy rate at 0.75% with a rare 6-3 split, as three board members backed an immediate increase. Governor Kazuo Ueda has adopted a wait-and-see approach towards geopolitical risks, saying there was "no urgency" to raise rates, while recent comments suggest he's paving the way for a rate increase. The Reserve Bank of Australia (RBA) is widely expected to hold rates unchanged at 4.35% on Tuesday, following three consecutive rate increases. Money markets price a 98% probability that the Cash Rate will remain at 4.35%, with the central bank noting that having raised rates three times, monetary policy is well positioned to respond to developments.
A high-level delegation from the European Union will visit Assam on June 8 and 9 to explore collaboration opportunities between Europe and India's northeastern states. According to reports from Business Standard, the visit follows the priorities outlined in the India-EU Comprehensive Strategic Agenda agreed upon earlier this year. During the trip, the delegation will hold discussions with the Assam government and business leaders to identify trade and investment opportunities. The visit will also mark the launch of Assam's first Blue Valley Cluster, an industrial hub focused on fragrances, AYUSH products and food processing. Members of the delegation are scheduled to meet Assam Chief Minister Himanta Biswa Sarma, while representatives of the Federation of European Businesses in India will engage with state officials and industry stakeholders.
India's retail inflation data for May will be released on June 12 and will be closely watched for signs of changes in consumer prices. As reported by Business Standard, retail inflation rose slightly to 3.48 per cent in April from 3.40 per cent in March, mainly due to higher food prices. Food inflation increased to 4.20 per cent from 3.87 per cent during the same period. The upcoming data will help policymakers assess whether food prices continue to pressure household budgets and whether inflation remains within the central bank's comfort range. According to Dow Jones Newswires, ANZ Research projects consumer prices to have risen 4.0%, which would mark the highest inflation rate since January 2025. According to a Union Finance Ministry report, inflation may edge higher due to recent fuel price hikes and weaker-than-normal monsoon rainfall. A Reuters poll of economists expects the May reading to rise to around 4%.
Deposit growth data, scheduled for June 12, will provide an update on liquidity conditions in the banking sector. According to Business Standard, deposit growth slowed marginally to 12.2 per cent in the week ended May 15, compared with 12.3 per cent in the previous reporting period. The data is important because steady deposit growth supports lending activity and reflects confidence in the banking system. Policymakers and banks will monitor the figures for signs of changing savings and liquidity trends.
India's foreign exchange reserves data, also due on June 12, will provide a snapshot of the country's external financial position. As reported by Business Standard, the Reserve Bank of India (RBI) reported that forex reserves increased by $938 million to $682.321 billion in the week ended May 28. This followed a sharp decline of $7.511 billion in the previous week. India's reserves had reached a record high of $728.494 billion in February before coming under pressure amid the West Asia conflict, which led to volatility in currency markets and prompted RBI intervention.
Indian markets on June 12 will track multiple key developments including the release of domestic inflation data, ongoing US-Iran conflict developments, and global market cues. According to CNBC TV18, investors will also assess higher-than-expected US jobless claims and wholesale inflation, the ECB's 25-basis-point rate hike, and the outcome of the Tata Sons board meeting. US President Donald Trump has again threatened to step up attacks on key Iranian energy infrastructure, while US stocks gained on a rebound in chip shares despite geopolitical tensions. The S&P 500 rose 0.4%, the Nasdaq Composite added 0.6%, and the Dow Jones Industrial Average advanced 270 points, or 0.5%. The week ahead also includes US retail sales data on Wednesday and Japanese CPI on Friday, providing additional market catalysts for global investors.
