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The Federal Reserve of the United States raised the interest rates in their meeting on the fourth of May 2022. During the Central Bank press conference, while answering questions, FED Chairman Powell implied, that another 0.50% hike is coming in June and perhaps in July, but ruled out a more aggressive hike of 0.75%. Many questions had been left unanswered. How far the Federal Reserve is willing to go to tackle the sky-high inflations in the US? How noticeable will be the decline in the US economy, can the US and the FED handle a housing crisis?
As expected, the latest FOMC monetary decision increased the volatility in the markets, which continued on Thursday and Friday.
After the initial knee-jerk reaction, the USD continued the bullish trend, and the stock market accelerated the bearish trend.
It is interesting to see if the Nasdaq, S&P 500, and Dow Jones will close the week below the previous weekly low, which will be a signal for further declines.
The Bank of England also raised its interest rates from 0.75% to 1%. The central bank surprised the markets by predicting a GDP decline of 1% in Q4, as a result of household income decline, as an aftermath of the high inflation and a decrease in economic activities. Some Members of the BoE voted for a more aggressive rate hike of 0.50%, but the Governor Andrew Bailey took the cautious approach, predicting economic shock in England because of the high energy prices.
Stagnation has arrived in Europe, more pieces of evidence for that were visible from the last week’s weak retail sales for Germany and a decline in the S&P Global Manufacturing for Spain, Italy, Germany, and the entire Euro Area.
The latest economic data coming out of China was a disaster, but that was not a surprise. The Caixin Services PMI for April came out at 36.2, the Caixin Composite PMI for April was 37.2, and the Caixin Manufacturing PMI for April was 46.0. One can only guess how long the China zero COV19 tolerance policy will continue.
Focus for the week ahead is on the following economic data releases:
Monday, 09, May 2022
- Japan – Overtime Pay YoY MAR
- Japan – Average Cash Earnings YoY MAR
- Japan – BoJ Monetary Policy Meeting Minutes
- Japan – Jibun Bank Services PMI Final APR
- Japan – Jibun Bank Composite PMI Final APR
- China – Balance of Trade APR
- China – Exports YoY APR
- China – Imports YoY APR
- Singapore – Foreign Exchange Reserves APR
- France – Balance of Trade MAR
- France – Current Account MAR
- France – Exports MAR
- France – Imports MAR
- UK – BBA Mortgage Rate APR
- UK – BoE Saunders Speech
- Canada – Building Permits MoM MAR
- Canada – 2-Year Bond Auction
- US – Fed Bostic Speech
- US – Wholesale Inventories MoM MAR
- US – Consumer Inflation Expectations APR
Tuesday, 10, May 2022
- New Zealand – Electronic Retail Card Spending MoM APR
- New Zealand – Electronic Retail Card Spending YoY APR
- South Korea – Current Account MAR
- Japan – Household Spending YoY MAR
- Japan – Household Spending MoM MAR
- Japan – 10-Year JGB Auction
- Australia – NAB Business Confidence APR
- Australia – Retail Sales MoM Final MAR
- UK – BRC Retail Sales Monitor YoY APR
- UK – BoE Saunders Speech
- Italy – Industrial Production MoM MAR
- Italy – Industrial Production YoY MAR
- Spain – 3-Month Letras Auction
- Euro Area – ZEW Economic Sentiment Index MAY
- Euro Area – ECB Guindos Speech
- Germany – ZEW Economic Sentiment Index MAY
- Germany – ZEW Current Conditions MAY
- Germany – 5-Year Bobl Auction
- US – NFIB Business Optimism Index APR
- US – Fed Williams Speech
- US – Redbook YoY 07/MAY
- US – IBD/TIPP Economic Optimism MAY
- US – Fed Kashkari Speech
- US – Fed Waller Speech
- US – 3-Year Note Auction
- US – Fed Mester Speech
- US – API Crude Oil Stock Change 06/MAY
Wednesday, 11, May 2022
- South Korea – Unemployment Rate APR
- Japan – Foreign Exchange Reserves APR
- Japan – Coincident Index Prel MAR
- Japan – Leading Economic Index Prel MAR
- Australia – Westpac Consumer Confidence Index MAY
- Australia – Westpac Consumer Confidence Change MAY
- China – Inflation Rate YoY APR
- China – Inflation Rate MoM APR
- China – PPI YoY APR
- Euro Area – ECB Elderson Speech
- Euro Area – ECB President Lagarde Speech
- Eurp Area – ECB Schnabel Speec
- Germany – Inflation Rate YoY Final APR
- Germany – Inflation Rate MoM Final APR
- Germany – Harmonised Inflation Rate MoM Final APR
- Germany – Harmonised Inflation Rate YoY Final APR
- Germany – 10-Year Bund Auction
- Italy – 12-Month BOT Auction
- UK -7-Year Treasury Gilt Auction
- Canada – 5-Year Bond Auction
- US – MBA Purchase Index 06/MAY
- US – MBA Mortgage Applications 06/MAY
- US – MBA 30-Year Mortgage Rate 06/MAY
- US – MBA Mortgage Market Index 06/MAY
- US – MBA Mortgage Refinance Index 06/MAY
- US – Inflation Rate YoY APR
- US – Core Inflation Rate YoY APR
- US – Inflation Rate MoM APR
- US – Core Inflation Rate MoM APR
- US – EIA Gasoline Stocks Change 06/MAY
- US – EIA Crude Oil Stocks Change 06/MAY
- US – EIA Distillate Stocks Change 06/MAY
- US – EIA Distillate Fuel Production Change 06/MAY
- US – EIA Cushing Crude Oil Stocks Change 06/MAY
- US – EIA Refinery Crude Runs Change 06/MAY
- US – EIA Heating Oil Stocks Change 06/MAY
- US – EIA Gasoline Production Change 06/MAY
- US – EIA Crude Oil Imports Change 06/MAY
- US – Fed Bostic Speech
- US – 10-Year Note Auction
- US – Monthly Budget Statement APR
Thursday 12, May 2022
- New Zealand – Food Inflation YoY APR
- New Zealand – Visitor Arrivals YoY MAR
- New Zealand – Business Inflation Expectations Q2
- Japan – Current Account MAR
- Japan – BoJ Summary of Opinions
- Japan – Bank Lending YoY APR
- Japan – Foreign Bond Investment 30/APR
- Japan – Foreign Bond Investment 07/MAY
- Japan – Stock Investment by Foreigners 30/APR
- Japan – Stock Investment by Foreigners 07/MAY
- Japan – 30-Year JGB Auction
- Japan – Eco Watchers Survey Current APR
- Japan – Eco Watchers Survey Outlook APR
- Australia – Building Permits MoM Final MAR
- Australia – Private House Approvals MoM Final MAR
- UK – GDP Growth Rate YoY Prel Q1
- UK – GDP Growth Rate QoQ Prel Q1
- UK – GDP MoM MAR
- UK – GDP 3-Month Avg MAR
- UK – Business Investment QoQ Prel Q1
- UK – Industrial Production YoY MAR
- UK – Manufacturing Production YoY MAR
- UK – Construction Output YoY MAR
- UK – Balance of Trade MAR
- UK – Goods Trade Balance MAR
- UK – Goods Trade Balance Non-EU MAR
- Uk – GDP YoY MAR
- UK – Industrial Production MoM MAR
- UK – Manufacturing Production MoM MAR
- UK – Business Investment YoY Prel Q1
- UK – Construction Orders YoY Q1
- UK – NIESR Monthly GDP Tracker APR
- Germany – Current Account MAR
- US – PPI MoM APR
- US – Core PPI MoM APR
- US – Initial Jobless Claims 07/MAY
- US – PPI YoY APR
- US – Jobless Claims 4-week Average 07/MAY
- US – Continuing Jobless Claims 30/APR
- US – Core PPI YoY APR
- US – EIA Natural Gas Stocks Change 06/MAY
- US – 8-Week Bill Auction
- US – 4-Week Bill Auction
- US – WASDE Report
- US – 30-Year Bond Auction
- US – Fed Daly Speech
- Canada – BoC Gov Gravelle Speech
- China – Vehicle Sales YoY APR
- China – New Yuan Loans APR
- China – Outstanding Loan Growth YoY APR
- China – Total Social Financing APR
- China – M2 Money Supply YoY APR
