Macroeconomic/ geopolitical developments
- Global stock markets experienced sharp declines due to a spike in US Treasury yields to four-week highs, driven by upbeat economic data and disappointing debt auctions, which heightened concerns about inflation and growth, plus led to a steepening yield curve and increased uncertainty about Federal Reserve interest rate cuts.
- Elevated rates are expected to persist, driving higher yields, and saw global equity market declines last week, as central banks adopt a “higher-for-longer” strategy to control inflation.
- US Treasuries rose and equities rebounded on Friday after inflation data matched expectations, with the PCE price index increasing 0.3% and core PCE rising 0.2%, easing investor concerns and reinforcing the likelihood of a potential interest rate cut later this year.
- As the Federal Reserve enters its blackout period, investors worldwide are closely monitoring key economic indicators, particularly US employment data Friday and global PMI figures on Monday and Wednesday, to gauge potential impacts on future monetary policy decisions and market movements.
Global financial market developments
- US and global equity averages extended slowly lower last week, despite a solid rebound on Friday.
- US and European bonds were little changed on the week, initially moving to higher, then lower yields.
- The US Dollar Index was choppy in a sideways range, in consolidation mode.
- Gold futures consolidated through last week.
- Oil futures stayed in consolidation mode, with a sharp rally then sell off.
Key this week
Central Bank Watch: The main central bank activities this week are the Bank of Canada Interest Rate Decision and Policy Statement on Wednesday and the EU Monetary Policy Statement on Thursday.
Macro Data Watch: The main macro data released this upcoming week are the global PMI data throughout the week and the US Employment data on Friday.
| Date | Major Macro Data |
| 06/03/2024 | Global Manufacturing PMI; US ISM Manufacturing PMI |
| 06/04/2024 | German Unemployment Change, Rate; US Factory Orders and JOLTS Job Openings |
| 06/05/2024 | Global Service PMI; US ISM Service PMI; Bank of Canada Interest Rate Decision and Policy Statement |
| 06/06/2024 | German Factory Orders; EU Retail Sales, ECB Interest Rate Decision, Policy Statement and Press Conference |
| 06/07/2024 | Chinese Trade data; EU Employment change and GDP; US and Canadian Employment reports |
