So expectations last week didn’t really go to plan, with reference to US inflation figures and industrial production. The presumption was for inflation to abate and therefore the rising cycle would slow and assets would be bought…. unfortunately although US inflation dropped to its lowest in 2 years, the core inflation ticked up which keeps the pressure on the Fed but there remains the hope that an increase in May will be the final one.
Michigan consumer sentiment didn’t help either as it showed stronger and illustrates the US consumer is more resilient than thought to rate rises.
Rates are now assumed to be topping as the central banks may need to react to a mild recession in the major economies indeed anecdotal evidence is that diesel sales are slowing; which , in turn, implies a slowdown at least in the delivery markets as consumers move from material purchases to more experience based purchases such as holidays. It may also explain the drop in retail sales.
Earnings last week showed the major banks, despite recent events, are doing well which gave support to the financial sector.
US data this week is light with really only manufacturing data to concern.
Away from the US, China data is important as it will indicate the potential for a worldwide slowdown – however this a theme for at least the past 6 months and seemingly more a worry for markets than consumers.
The UK has inflation, retail sales and unemployment to ponder and with the IMF projecting the economy to shrink by 0.3% and on-going strike action at best the UK will stagnate.
Commodities were mixed and volatile over the week. Oil recovering from recent lows and looking supported.
Gold traded an erratic $60 range making new highs and finding them unsustainable and headed back to the opening $2,000 per troy ounce mark. Copper found its feet again with a drop in inventories and, in contrast with the stock market, hopes of demand increase but it feels as though this market fears a global shortage rather than a demand shortage.
Date | Country | Figures | Expected | Previous |
April 18 | China | Industrial Production | 2.7% | 2.4% |
| China | GDP Growth rate | 3.2% | 2.9% |
| GBP | Unemployment Rate | 3.8% | 3.7% |
April 19 | GBP | Inflation rate YoY | 10.2% | 10.4% |
April 20 | USA | Initial Jobless Claims | 244K | 239K |
April 21 | GBP | Consumer Confidence | -34 | -36 |
| Japan | Inflation Rate YoY | 3.2% | 3.3% |
| GBP | Retail Sales MoM | -0.5% | 1.2% |
| USA | S&P Manufacturing PMI | 48 | 49.2 |
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