US ECONOMY
We are back in the green as markets and investors’ confidence returns. The S&P 500 regained its recent losses as indications that inflation has begun to slow provided investors with the green light to pick up cheap stocks.
UK ECONOMY
According to Bloomberg, this Thursday, the bank holiday to celebrate the Queen’s 70 Jubeliee, could tip the economy into contraction, shaving 0.5pt of GDP for the second quarter. This could weaken GBP come early July.
CHINA ECONOMY
China is finally starting to loosen Covid restrictions and bring the economy back up to speed. Investors feared that if restrictions continued for much longer, the supply chain slow down would begin to affect world trade and trigger a global recession.
RUSSIA SANCTIONS
Hungary prevented the rest of the EU from finalising a new package of sanctions over the invasion. However, the talks will continue this week. In a U-Turn from Ursula von der Leyen, she stated that it was better to purchase Russian Oli, so Putin couldnt sell it for higher prices to others. Clearly, the EU cannot cut Russia’s curial energy supply any time soon.
ECB COMMENTS
Chief Economist Philip Lane reinforced President Christine Lagarde’s roadmap of changing interest rates for the first time since 2011. Still, he suggested the increase would be gradual 0.25pt rises, one in July and September. The markets have already priced in expectations, so any faltering or reversal could weaken EUR in the short term.
WEEK AHEAD KEY EVENTS:
Monday
- US markets are closed for Memorial Day Monda
Tuesday
- China PMI
- Euro Inflation Figure (HICP) 7.7% Expected.
Wednesday
- USA Manufacturing PMI(May)
- A mix of FED and ECB Speeches
Thursday
- USA ADP Employment Change(May)
Friday
- EUR Retail Sales (YoY)(Apr)