Macroeconomic/ geopolitical developments
- According to House Speaker Kevin McCarthy a deal to raise the debt ceiling is “doable” and maybe as soon as Sunday.
- A re-pricing of Fed rate hike expectations suggesting the market is now beginning to price back in the possibility of a 25bps rate hike in June.
- Earnings season done, the key takeaways. The tech stocks were the big winners, but the broader picture is not so rosy though, as there has been an overweight of companies issuing negative EPS guidance which suggests Q2 is looking shaky.
Global financial market developments
- The major US stock averages were strong, with the S&P 500 finally breaking out of its range and joining the Nasdaq to hit a multi-month high.
- European indices posted solid gains to set multi-month highs, with the German Dax at a record level.
- The Japanese benchmark, the Nikkei 225 got back to levels not seen since the 1990s.
- US and European Bond yields surged to higher yields, with debt ceiling worries apparently in the rear-view mirror…
- The US Dollar Index surged from near a multi-month low at the start of May to now hit a multi-month, retaining a positive tone.
- Gold plunged from an early May multi-month high to a multi-month low, in reaction to the US Dollar strength.
- Oil has consolidated the early May rebound from a multi-week low.
Key this week
- Central Bank Watch: Fed speakers stay in focus, with Wednesday’s FOMC minutes the highlight of a quiet central bank week…
- Macroeconomic data: A quiet data week, the standouts are Tuesday’s Flash PMI data and Wednesday’s UK CPI.
|Date||Key Macroeconomic Events|
|22/05/2023||Eurozone Consumer Confidence (flash)|
|23/05/2023||Flash PMIs for Japan, the Eurozone, the UK and the US; New Home Sales, Richmond Fed Manufacturing|
|24/05/2023||UK CPI inflation, German IFO Business Climate, FOMC minutes|
|25/05/2023||US Weekly Jobless Claims, Pending Home Sales|
|26/05/2023||UK Retail Sales, US Goods Trade Balance, US Durable Goods Orders, US Core PCE inflation, final Michigan Sentiment|