Macroeconomic/ geopolitical developments
- Selling exhaustion in the equity markets saw recoveries last week, and a cross market shift to a “risk on” theme.
- This was helped by some positive forecasts from Macy’s, Ralph Lauren and Nordstrom.
- Fed Minutes pointed to hints of flexibility, helping the more positive outlook.
- Economic data was mixed, but the PCE data to end the week (which is the Fed’s preferred measure of inflation), was better than expected, highlighting potential for inflation to be peaking.
Global financial market developments
- The major US averages posted their first weekly gains for seven weeks, which was the longest losing streak since 2001.
- This has seen the S&P 500, Nasdaq and DJIA all produce technical “bases”
- European and UK indices have posted strong rallies, with the FTSE 100 back near cycle highs.
- US 10yr yields broke even lower, reinforcing a peak in yields.
- The US Dollar Index weakened further, completing a reversal.
- Gold rebounded further with USD weakness, securing a base for a more positive tone.
- Oil moved higher again, for a positive outlook still.
- Copper bounced further to build a small base, easing vulnerability.
Key this week
- Geopolitical focus: Still closely monitoring the war in Ukraine
- Holidays: Monday is the US Memorial Day Holiday, cash equity and bond markets closed. UK markets are closed on Thursday and Friday for the Jubilee holidays.
- Central Bank Watch: For Central Banks, we get the Bank of Canada (BoC) interest rate decision, statement and press conference on Wednesday.
- Macroeconomic data: The standout data this week are the global S&P Manufacturing, then Services and Composite PMI data on Wednesday and Friday respectively, and the equivalent US ISM data on the same days, plus the US Employment report also Friday.
|Key Macroeconomic Events
|US Memorial Day Holiday, cash equity and bond markets closed; German CPI
|Chinese PMI; German Unemployment; Canada GDP
|Australian GDP; German Retail Sales; global S&P Manufacturing PMI; US ISM Manufacturing PMI; BoC interest rate decision, statement and press conference
|UK markets are closed for the Jubilee holiday; US ADP Employment
|UK markets are closed for the Jubilee holiday; global S&P Services and Composite PMI; US Employment report; US ISM Services PMI