Macroeconomic/ geopolitical developments
- Inflation concerns remain, after the recent spike in US CPI data.
- The Fed Minutes on Wednesday highlighted an improving US economy but still far from the Fed’s goals, this did not have a significant impact on global financial markets.
- Tensions in Gaza have eased with an Israel-Hamas ceasefire announced.
- The Indian COVID variant continues to spread in the UK and Europe, though still without a significant impact on death rates.
- Cryptocurrencies stayed volatile suffering further liquidation pressures after further statements from Elon Musk.
Global financial market developments
- Global stock averages were mixed last week, but still capped below record and multi-month highs.
- Big Tech has again underperformed, with inflationary fears limiting upside for this sector.
- The US Dollar was mixed but remains on the back foot.
- The Euro was indecisive but did manage to post gains versus the USD.
- GBPUSD spiked close to the multi-year high.
- Gold pushed higher, leaving an upside bias.
- Oil sold off but managed to bounce late in the week.
- Copper also corrected lower from a mid-May multi-year high, bounced into the end of the week.
Key this week
- Monitoring easing of lockdown measures, notably in Europe.
- Still looking at COVID-19 cases, hospitalisations and deaths globally, plus the spread of the Indian variant in the UK and Europe.
- Looking for the ceasefire in Gaza to hold.
- Central Bank Watch: A quiet week for central banks, with the Reserve Bank of New Zealand (RBNZ) interest rate decision, statement and press conference on Wednesday.
- Macroeconomic data: Also, a quiet data week with the US GDP, Durable Goods Orders and Personal Consumption Expenditure (PCE) the standouts on Thursday and Friday. See the table below for details and more.
|Date||Key Macroeconomic Events|
|24/05/21||Nothing of note|
|25/05/21||German GDP and IFO|
|26/05/21||RBNZ interest rate decision, statement and press conference|
|27/05/21||US GDP, Durable Goods Orders and PCE|
|28/05/21||Japan CPI; US PCE and Michigan Consumer Sentiment|