📈 Macro-News round-up
#MarketNews
🇪🇺 **Europe:** According to a fresh ECB survey, euro zone consumers lowered their inflation expectations for the next 12 months to 2.9% in May from 3.0% in April. Inflation has fallen quickly in the past year but the ECB expects it to hover around current levels of 2.4% until disinflation kicks in again in 2025. The ECB has signaled a rate cut in June given cooling price pressures but some policymakers warn against premature further moves while inflation remains elevated. Income expectations were steady while consumers were less pessimistic about economic growth, foreseeing a 0.8% GDP contraction versus 1.1% previously.
🇪🇺 Francois Villeroy de Galhau, member of the Governing Council of the European Central Bank, has made a statement in which he takes a rate cut for granted in ECB appearances. He indicates that only if there is an economic shock would we see a different scenario.
🇪🇺 Today, German business morale stagnated in May according to the Ifo institute survey, missing forecasts of an improvement and pointing to slow economic recovery.
🇺🇸 **US:** We received some positive news last Friday on inflation forecasts, which were revised lower for both the 1 year ahead of time and the 5 year expectations in the University of Michigan poll.
🇺🇸 The US 2-year bond reached 4.95% in Friday’s session, and is now slightly lower at 4.93%. SP500 recovered the falls left last Thursday, and is now trading above 5325 points, 5350 seems to remain a key resistance. Meanwhile, Nasdaq100 seems to be in the lead, approaching for the second time record highs around 19,000 points, currently trading at 18,850 points.
🇺🇸 The most important event of the week is undoubtedly the release of the Fed’s PCE inflation data. The worst case scenario for the market would be that this data exceeds expectations, confirming a resilient and bullish inflation, which would be enough for the Fed to punish credit and interest rates even more.
🌎 **Geopolitics:** Abdullah Ramadan, a 22-year-old Egyptian soldier, was killed in an incident at the Rafah border between Egypt and Gaza. Israeli authorities confirmed that an ‘unusual incident’ took place, but are investigating further. Egyptian sources said Israel opened fire first, while the IDF said troops responded to Egyptian fire. Tension appears to be rising between Israeli and Egyptian forces in the Rafah border area, amid the ongoing conflict in Gaza. This event could be the cause of the rebound in crude oil prices, with Brent crude rising from $80 to $83 in the last 24 hours.
🌎 Hungarian PM Orban says Hungary will not participate in the “war” in Ukraine and is reassessing its NATO role. Hungarian PM Orban says Hungary will not participate in the “war” in Ukraine and is reassessing its NATO role. Hungary will not send weapons, troops or funds to Ukraine, or allow its territory for staging Ukrainian forces. Orban asserts NATO is a defensive alliance not attacked. Hungary urges partners to achieve peace through diplomacy rather than escalate tensions. The Foreign Minister warned the threat of world war is growing due to “insane” Western leader statements and Russian nuclear drills.
🗓️ **Monday:**
– Germany: Business Expectation index.
– Europe: Eurogroup meeting & Lane of ECB Speaks.
– US: Williams of FOMC speaks.
🗓️ **Tuesday:**
– Australia: Retail Sales.
– Japan: Core CPI.
– US: Consumer Confidence.
🗓️ **Wednesday:**
– Japan: Adachi, Board member of BoJ speaks.
– Germany: Consumer Climate, CPI.
🗓️ **Thursday:**
– US: Bostic of Fed Speaks, Jobless claims, GDP Q1 review, Trade Balance & oil inventories.
– UK: Bailey of BoE Speaks.
🗓️ **Friday:**
– Japan: Tokyo CPI & Industrial Production.
– China: PMI Servs & Manuf.
– Germany: Retail Sales.
– France: CPI & GDP Q1.
– Europe: CPI.
– US: PCE index.
– Canada: GDP.
