💼 Macro-News round-up
#MarketNews

🇬🇧 UK: Today is a key day for the United Kingdom. The Bank of England will decide whether to change the interest rate, and its governor, Bailey, will give a speech that will make the situation of the pound and the London stock market interesting. The likelihood of an interest rate reduction this time around has pretty much evaporated. Perhaps more information about the central bank’s intended timing of its initial action will become available. The sensitivity of the pound to divergence BOE-Fed policy has decreased since Covid, according to economists at Deutsche Bank this week, and the consequent impact on inflation has also significantly decreased.

🏦 Fed: We are experiencing a wave of hawkish comments from members of the Federal Reserve this week. Yesterday, Susan Collins, the president of the Boston Fed, hinted that in order to slow demand and decrease price pressure, rates will probably need to be kept at a two-decade high for longer than initially anticipated.

💵 The dollar remains strong, possibly fueled by these comments. The DXY trades above 105.50 points and could again attempt to reach the highs of 107 points left behind in 2023, just before the Fed started talking about cutting rates.

🇨🇳 China: Early this morning we had the publication of China’s trade balance. Both exports and imports have improved above forecasts, and are coming out of the downward cycle in which they were in previous periods, moving from negative to positive territory and above expectations, undoubtedly good news for global markets that in 2023 feared an economic slowdown in China. Exports rose 1.5% in April, compared to 1% expected and -7.5% in the previous period. Imports are up 8.4% for the same period, compared to 5.4% expected and exceeding the -1.9% of the previous period.

🌍 Geopolitics: If you thought Chinese President Xi Jinping’s visit to Europe would not be politicized, surprise: EU Commission President Ursula von der Leyen and French President Emmanuel Macron are expected to warn Chinese President Xi Jinping about “unfair trade practices” and urge China to play a greater role in resolving the Ukraine conflict.

🤪 Lunatics: Luna means moon in many languages. China and Russia are working together to construct a nuclear power station on the moon, with a completion date of 2033–2035. They will collaborate to operate this power plant on the International Lunar Research Station (ILRS).

🚀 NASA is also involved, having completed the design stage of a small-scale nuclear fission reactor that will produce power. The reactor is scheduled to be delivered for use on the Moon in the early 2030s. They are not alone in their endeavor, as Rolls-Royce has been granted £2.9 million by the UK Space Agency to investigate the feasibility of using nuclear power to support a Moon outpost in the future.