Eid Mubarak to all our readers.
The markets are fixated at the moment with inflation and now possible recession, in fact, there’s a danger it will talk itself into one.
We have inflation data out of Europe, China and USA this week and its not likely to show much of a slowing and indeed after the US employment figures the yield on the US 10 year jumped from 2.97% to 3.1% as the market frets about wage inflation being the next stage on from energy and food inflation.
Michigan consumer sentiment important to gauge the mood of the US consumer and to discern if they are still spending even with prices rising. If this comes in as expected or higher it should be bullish for rates and probably the US$ as it implies the consumer can absorb inflationary rise and thereby rate rises.
The US$ is strong across the board especially against the Yen and GBP both of whom are struggling under political pressures and in the case of the Yen the large rate differential. Rates differences, to a lesser extent, are likely to lead to EUR/US$ trading through parity sooner or later.
Commodities are volatile and are being moved predominately on perception of global slowdown fears thus base metals: copper and aluminium are trading lower and even the oil price traded through US$100 but at time of writing has recovered.
The outlier was palladium which has rallied strongly over last week from $1900 to a high of $2180 after the Chinese notified the market of a possibility of issuing $220billion equivalent short term bond to help an economy that is stifled by Chinese zero covid policy but market feeling is that the rally is more that its already a tight market and that any sign of a raise in demand will lead to a disproportionate rise in price.
Date | Country | Figures | Expected | Previous |
July 12 | GBP | BRC Retail Sales | -0.5% | -1.5% |
July 13 | GER | Inflation Rate YoY | 7.6% | 7.9% |
| GBP | GDP MoM | -0.1% | -0.3% |
| USA | Inflation Rate YoY | 8.8% | 8.6% |
| USA | Core Inflation Rate YoY | 6% | 6% |
July 14 | USA | PPI MoM | 0.9% | 0.8% |
| USA | Initial Jobless Claims | 238k | 235k |
July 15 | China | GDP Growth | 1.7% | 4.8% |
| USA | Michigan Consumer Sentiment | 50 | 49.3 |
| USA | Retail Sales MoM | 0.5% | -0.3% |
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