Cooling Inflation and Positive Growth Data Buoy US and Global Stocks


Macroeconomic/ geopolitical developments

  • US inflation is cooling, as last week saw the US Personal Consumption Expenditures (PCE) price index increased 0.1% in May, with the YoY increase down to 3.8%, its lowest level since April 2021, whilst the core PCE index, the Fed’s preferred inflation measure, fell to 4.6% YoY.
  • And US data stays firm, bucking the risks of a recession, as in the last week Consumer Confidence, Durable Goods Orders and housing data have all surprised to the upside, plus there was a sizeable upward revision to the final reading of Q1 GDP.
  • At the ECB’s annual Forum on Central Banking in Sintra, Portugal, the ECB President Christine Lagarde, Bank of England (BoE) Governor Andrew Bailey and Fed Chair Powell all continued with the mantra of higher for longer on interest rates. 
ECB’s annual Forum on Central Banking in Sintra, Portugal
  • European and Asian indices were also notably higher.
  • US and European Bond yields pushed to the upper end of wider consolidation ranges.
  • The US Dollar Index was in a consolidation mode.
  • Gold sold off again but did stage a rebound from a new multi-week low.
  • Oil stayed in a range but retains a more negative tone ahead of this week’s OPEC meeting.
Oil future

Key this week

  • Geopolitical: US Independence Day holiday on Tuesday, all cash and futures markets closed. OPEC meeting Wednesday-Thursday. Tensions in Russia will still need to be monitored and will likely keep risks elevated across global financial markets.
  • Central Bank Watch: Central bank focus is on the Reserve Bank of Australia (RBA) on Tuesday and the Fed Minutes on Wednesday.
  • Macroeconomic data: A busy week for data with the standouts being US ISM Manufacturing and Services PMI Monday and Thursday respectively, global PMI data Monday and Wednesday, and the US Employment report featuring the Non-Farm Payroll data on Friday.
DateKey Macroeconomic Events
07/03/2023Eurozone & UK Final Manufacturing PMI; US ISM Manufacturing, US Factory Orders
07/04/2023Reserve Bank of Australia monetary policy; US Independence Day holiday
07/05/2023China Caixin Services PMI; OPEC meeting; FOMC meeting minutes
07/06/2023ADP Employment Change, US Weekly Jobless Claims, ISM Services
07/07/2023US Employment Situation; Canadian Unemployment

Editor in chief

Steve Miley is the Market Chartist and has 32 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued

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