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📊Market Event Round Up
Updates on US inflation creeping up, the UK dropped some crucial employment data and made a rate decision, plus China’s trying to beef up its economy with a massive bond sale.
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Our market recap was a hit last week, so we're keeping the ball rolling with updates on US inflation creeping up, the UK dropped some crucial employment data and made a rate decision, plus China’s trying to beef up its economy with a massive bond sale.
Monday’s Market Event Recap:
🇺🇸 US inflation. The latest CPI print drops on Wednesday. Economists polled by Reuters expect the figure will rise 0.3% on the previous month. That could empower the Fed to hold off on cutting rates.
🇬🇧 UK wages and unemployment. An important reading for the BOE on Tuesday. They need to show a softening to keep a June rate cut on the table.
🇨🇳 China bond sale. China will start selling 1 trillion yuan ($138 billion) of debt on Friday to boost the economy. It’s the first sale of its kind since 2020 and will continue through November.
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Today’s Market Event Update:
🇺🇸 US inflation. Three main takeaways from the CPI report.
In April, the consumer price index rose by 0.3%, slightly below expectations, with core CPI increasing by the same margin, marking the smallest monthly gain in core CPI this year and the lowest annual core CPI gain in three years at 3.6%.
Housing costs continued to drive inflation, motor vehicle insurance surged faster since 1976, and medical care expenses rose. However, used vehicle prices, airfares, and household furnishings saw declines.
April's retail sales stagnated, with no change in the headline figure and a 0.3% decline in the "control group" figure, signaling a slowdown in consumer spending momentum. This data spurred predictions of Federal Reserve interest-rate cuts later in the year, with interest-rate futures showing confidence in two reductions by the end of 2024. As a result, treasuries and stock futures rose, while the dollar weakened, possibly leading to stocks reaching new highs.
Credit: Reuters
🇬🇧 UK wages and unemployment. Dented hopes of a rate cut.
Despite a rise in unemployment to 4.3%, wages in the UK continued to outpace inflation at a surprising rate of six percent, complicating the Bank of England's efforts to manage inflation and potentially delaying anticipated interest rate cuts.
The mixed signals in the labor market, including a significant drop in workers on payrolls and a quarterly decline in job vacancies, present challenges for policymakers, with economists split on the timing of potential rate cuts amid optimism from Chancellor Jeremy Hunt and cautious assessments from analysts like Alice Haine and Rob Wood.
Credit: Investopedia
🇨🇳 China bond sale. Today is the day.
Keep your ears and eyes open for news on China’s sale of 1 trillion yuan ($138 billion) of debt to boost the economy. It’s the first sale of its kind since 2020 and will continue through November.
Credit: Reuters
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