The Day at a Glance | June 12 2023

*This week will bring lots of monetary policy decisions: The FED is expected to “skip” its decision on Wednesday in favor of collecting more economic data, while the European Central Bank is expected to announce a new 25bp increase in its benchmark rates. The Bank of Japan is expected to maintain an ultra-accommodative stance. 

*Former US President Donald Trump will be prosecuted this Tuesday in Miami on dozens of charges related to mishandling classified documents. 

*UBS has completed the acquisition of Credit Suisse, with the Swiss bank´s balance sheet reaching 1.6 trillion dollars. 

*On Monday, businessman and four-time Prime Minister of Italy, Silvio Berlusconi, passed away at the age of 86 due to leukemia. 

*The United States formally requested to rejoin the United Nations Educational, Scientific and Cultural Organization (UNESCO) after having left it during the Trump administration. 

Economic environment

Monetary policy week. On Tuesday and Wednesday, the Federal Reserve´s Open Market Committee will have its fourth meeting of the year; it´s expected to maintain the federal funds rate at 5.25%. This is more than a “pause” – it´s a “halt” in its June decision – with the intention of evaluating more economic information. The subtle difference between the two is that a “pause” suggests the possibility of not increasing the benchmark rate again, while a “halt” in the FED´s next decision points out that it´s very likely that they will increase the rate – just not now. The futures market has already priced in the next increase. It believes this will happen in July and will be the last interest rate hike. Meanwhile, the European Central Bank is expected to once again increase all three of its key reference rates by ¼ point, despite the revision in GDP figures for the end of 2022 and the beginning of 2023, which now indicate a technical recession. Additionally, analysts expect an increase in July followed by a pause for the rest of the year, according to a survey carried out by Reuters. Lastly, the Bank of Japan is expected to maintain its ultra-accommodative stance on Friday.