Macroeconomic/ geopolitical developments
- US debt ceiling concerns are rising, Treasury Secretary Janet Yellen commented last week that a US default would be an “economic and financial catastrophe”.
- US CPI headline inflation fell more than expected to 4.9% on Wednesday, whilst core inflation dipped slightly but was in line with expectations at 5.5%.
- Inflation continues to plunge in China, the PPI (factory-gate inflation) accelerated down to -3.6%, with headline CPI at +0.1%, the lowest since early 2021.
- The Bank of England (BoE) joined the Reserve Bank of Australia (RBA), the Fed and the European Central Bank (ECB) hiking by 0.25% on Thursday as widely expected.
- UK interest rate swaps markets are pricing possibly two more 25bps hikes to bring the rate 5.00%, then pausing later in the summer.
Global financial market developments
- The major US stock averages were mixed, with a plunge through last week, then a firm rebound Friday, retaining intermediate-term the DJIA lower, the S&P little changed on the week, whilst the Nasdaq hit a multi-month high.
- European indices consolidated, near to recently set multi-month highs.
- US and European Bond yields were in consolidation mode but retain a lower yield bias.
- The US Dollar Index rebounded from near a multi-month low, switching to a more positive tone.
- Gold consolidated below a recently set multi-month high.
- The early may Oil rebound from a multi-week low faltered back lower last week.
Key this week
- Central Bank Watch: Fed speakers in focus, with no significant central back activity in the coming week.
- Macroeconomic data: A quiet data week, UK Unemployment, German ZEW and US Retail Sales are probably the standouts, all released on Tuesday.
|Date||Key Macroeconomic Events|
|15/05/2023||Eurozone Industrial Production|
|16/05/2023||Chinese Industrial Production & Retail Sales; UK Unemployment; Eurozone Trade Balance; Eurozone GDP (2nd); German ZEW Economic Sentiment; Canadian Inflation; US Retail Sales & Industrial Production|
|17/05/2023||Japanese GDP (Q1 prelim) & Industrial Production; Eurozone HICP Inflation (final); US Building Permits & Housing Starts|
|18/05/2023||Australian Unemployment, US Weekly Jobless Claims, Philly Fed Manufacturing; US Existing Home Sales|