From the latest FOMC Meeting Minutes released last week, we learned that “a number of participants suggested that if the economy continued to make rapid progress toward the Committee’s goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases.” This is the first signal from the FED about a potential QE tapering and upcoming changes in their monitory policy. However, this doesn’t mean that the FED will signal anything concrete, we may witness the opposite if the Chairman Powel put the QE talks to end with arguments that the economy is far from reaching the Committee goals. Judging by the reaction in the USD, the markets are not betting on FED QE tapering just yet, but that may change quickly.
One thing is clear, the upcoming US employment data report and inflation data are vital and will bring volatility in the markets in June.
Next week on Monday is a Bank holiday for most of Europe and Canada, therefore lower liquidity for the start of the week is expected.
On Wednesday the 26th of May 2021 the Reserve Bank of New Zealand will announce their interest rate decision and Monitory Policy statement followed by a press conference.
Robust economic data and earnings reports are continuing, with last week’s blowout earnings reports from Walmart(WMT), Home Depot Inc. (HD), Target Corp. (TGT), Baidu (BIDU), the list goes on.
The following economic data from last week were impressive and are suggesting synchronized global economic recovery.
- New Zealand Services APR reported at 61.2 vs. expectation for 53.00 and previous at 52.9.
- China Industrial Production YoY APR reported at 9.80% vs. expectations for 10.00%.
- China Retail Sales YoY APR reported at 17.7% vs. expectations for 26.00%.
- China Unemployment Rate APR reported at 5.1% vs. expectations for 5.3%.
- US NY Empire State Manufacturing Index MAY reported at 24.3 vs. expectations for 25.
- UK Unemployment Rate MAR reported at 1.5% vs. expectations for 1.4%.
- Canada Inflation Rate YoY APR reported at 3.4% vs. expectations for 3.2%.
- Canada Inflation Rate MoM APR reported at 0.5% vs. expectations for 0.3%.
- Canada Core Inflation Rate YoY APR reported at 2.3% vs. expectations for 2.1%.
- Japan Exports YoY APR reported at 38% vs. expectations for 30.9%.
- Japan Imports YoY APR reported at 12.8% vs. expectations for 8.8%.
- Australia Unemployment Rate APR reported at 5.5% vs. previous at 5.6%.
- Indonesia Exports YoY APR reported at 51.94% vs. expectations for 41.0%.
- Indonesia Imports YoY APR reported at 29.93% vs. expectations for 29.8%.
- UK CBI Industrial Trends Orders MAY reported at 17 vs. expectations for 5.
- Canada ADP Employment Change APR reported at 351.3K vs. previous at 266.7K%.
- US Initial Jobless Claims 15/MAY reported at 444K vs. expectations for 451K.
- Australia Markit Manufacturing PMI Flash MAY reported at 59.9 vs. expectations for 59.
- Australia Markit Services PMI Flash MAY reported at 58.2 vs. expectations for 59.
- Australia Retail Sales MoM Prel APR reported at 1.1% vs. expectations for 0.7%.
- UK Retail Sales YoY APR reported at 42.4% vs. expectations for 37%.
- UK Retail Sales MoM APR reported at 9.2% vs. expectations for 3.8%.
- Switzerland Industrial Production YoY Q1 reported at 4.8% vs. expectations for -2%.
- France Markit Manufacturing PMI Flash MAY reported at 59.2 vs. expectations for 58.4.
- France Markit Services PMI Flash MAY reported at 56.6 vs. expectations for 53.6.
- Germany Markit Manufacturing PMI Flash MAY reported at 64 vs. expectations for 65.7.
- Germany Markit Services PMI Flash MAY reported at 52.8 vs. expectations for 52.5.
- Euro Area Markit Manufacturing PMI Flash MAY reported at 62.8 vs. expectations for 62.2.
- Euro Area Markit Services PMI Flash MAY reported at 56.9 vs. expectations for 54.5.
- UK Markit Manufacturing PMI Flash MAY reported at 66.1 vs. expectations for 60.0.
- UK Markit Services PMI Flash MAY reported at 61.8 vs. expectations for 61.7.
- Canada Retail Sales MoM MAR reported at 3.6% vs. expectations for 1.5%.
- Canada Retail Sales YoY MAR reported at 23.7% vs. expectations for 9%.
- US Markit Manufacturing PMI Flash MAY reported at 70.1 vs. expectations for 64.0.
- US Markit Services PMI Flash MAY reported at 61.5 vs. expectations for 59.8.