Are you buying the dip? The Nasdaq fell by around 13%, its worst performance since 2008, and the S&P 500 fell by 8.8%, hitting its March 2020 pandemic lows. Euro and JPY also suffered losses, with Euro hitting five years low at 1.047, a drop of about 14%, whilst JPY fell a whopping 27% against the USD since the start of the year. Another economic red flag was the US Q1 GDP print at an alarming negative -1.4%, recession inbound, maybe?
FEDERAL RESERVE RATES WEDNESDAY
Markets are pricing in a 50bps hike this May and June as Dollar strength dominates the market and the US 10-year Treasury note yield hit 3%.
BANK OF ENGLAND RATES THURSDAY
This Thursday, the BOE will decide rates and unveil its latest forecasts for inflation and growth. The committee will likely raise rates by a quarter-point to bring the lending rate to 1%, the first time since 2009.
UK ELECTIONS
Local elections begin this Thursday across the UK. There will be many contested seats up for grabs, and with the non-stop scandals from Westminster, the polls will paint a picture national mood. A heavy loss for the Conservatives would result in a potential leadership challenge. In Northern Ireland, voters will elect a new assembly. Sinn Fein looks set to become the most significant party ahead of the DUP, meaning a Republican leader for the first time.
DATA TO WATCH
Monday – USA – ISM Manufacturing PMI(Apr)
Wednesday – EUR – Retail Sales (YoY)(Mar)
Wednesday – USA – Fed Interest Rate Decision
Thursday – UK – BoE Interest Rate Decision
Friday – USA – Nonfarm Payrolls(Apr)