Bottom line

Four central banks will render their decisions on interest rates this week. The ECB will have to balance inflationary pressures with anemic growth. The Bank of England will have to balance a soaring housing sector with a surprisingly stagnant overall economy. The Bank of Canada and the Reserve Bank of Australia, on the other hand, will have to decide how much they want to temper their rebounding economies. Canada’s GDP jumped at a 6 percent annualized rate in the first quarter while Australia’s economy is expected to climb vigorously when the data are announced this week. And we will finally get a fix on a recovering Japanese economy when first quarter GDP is released on Friday. While the first quarter is expected to show positive growth thanks to rising exports, domestic demand continues to be non-existent.

Britain will be celebrating Queen Elizabeth’s golden jubilee on Monday and Tuesday. And soccer fans, especially in Europe, will be distracted from everyday activities such as work by the World Cup games. Equity trading is expected to falter as market players prefer to watch the games rather than the averages. Estimates of potential loss of growth vary from 0.3 to 0.75 percentage points in the top 10 countries in the World Cup. In Britain alone, the combined impact of the World Cup and the jubilee could be a loss of 0.8 percentage points in second quarter GDP.