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Bob Mason
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The Stats

It was a quieter week on the economic calendar, in the week ending 14th May.

A total of 49 stats were monitored, following 57 stats from the week prior.

Of the 49 stats, 28 came in ahead forecasts, with 16 economic indicators coming up short of forecasts. There were 5 stats that were in line with forecasts in the week.

Looking at the numbers, 27 of the stats reflected an upward trend from previous figures. Of the remaining 22 stats, 18 reflected a deterioration from previous.

For the Greenback, a marked pickup in inflationary pressures delivered support. In the week ending 14th May, the Dollar Spot Index rose by 0.10% to 90.321. In the previous week, the Dollar had declined by 1.15% to 92.230.

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Out of the U.S

It was a mixed set of numbers from the U.S.

Early in the week, April inflation figures sent riskier assets into the deep red.

The core annual rate of inflation accelerated from 1.6% to 3.0% in April. Fueling fears of a shift in FED monetary policy.

On Thursday, the weekly jobless claims figures were upbeat. In the week ending 7h May, initial jobless claims fell from 507k to 473k. This was the lowest reading since the start of the pandemic back in March 2020.

At the end of the week, retail sales, consumer confidence, and industrial production figures delivered mixed results.

In April, retail sales were flat following a 10.7% jump in March, with core retail sales falling by 0.8%, month-on-month. In March, core retail sales had risen by 9.0%.

Economists had forecast a 0.7% rise in core retail sales and a 1% increase in retail sales.

Prelim consumer sentiment figures also disappointed. In May, the consumer sentiment index fell from 88.3 to 82.8 versus a forecasted increase to 90.4.

While falling short of forecasts, industrial production did rise further, however. In April, production increased by 0.7% following a 2.4% rise in March.

In the equity markets, the NASDAQ slid by 2.34%, with the Dow and the S&P500 seeing losses of 1.14% and 1.39% respectively.

Out of the UK

It was a relatively busy week.

Early in the week, retail sales impressed, supporting the optimistic economic outlook.

In April, the BRC Retail Sales Monitor increased by 39.6% year-on-year. In March, sales had risen by 20.3%.

Mid-week, the focus shifted to 1st quarter GDP and industrial and manufacturing production figures.

The stats were also skewed to the positive.

In the 1st quarter, the UK economy contracted by 1.5%, quarter-on-quarter. Compared with the 1st quarter of 2020, the economy contracted by 6.1%. The contraction in the 1st quarter was less severe than had been forecasted.

Production figures were upbeat at the end of the quarter. In March, manufacturing production increased by 2.1%, with industrial production rising by 1.8%.

While the stats influenced, market optimism towards the UK economic outlook continued to support the Pound.

In the week, the Pound rose by 0.81% to end the week at $1.4097. In the week prior, the Pound had risen by 1.17% to $1.3984.

The FTSE100 ended the week down by 1.21%, partially reversing a 2.29% gain from the previous week.

Out of the Eurozone

Early in the week, investor confidence and economic sentiment figures were in focus.

The stats were skewed to the positive, with both investor and economic sentiment figures aligned with market optimism.

In May, the Eurozone’s Sentix Investor Confidence Index surged from 13.1 to 21.0.

The more influential ZEW Economic Sentiment figures for Germany and the Eurozone also impressed.

Germany’s ZEW Economic Sentiment Indicator jumped from 70.7 to 84.4, with the Eurozone’s climbing from 66.3 to 84.0.

Mid-week, industrial production figures for the Eurozone and finalized inflation figures for France and Germany were also in focus.

In the month of April, German consumer prices increased by 0.7%, following a 0.7% rise in March. This was in line with prelim figures.

At the turn of the quarter, the annual rate of inflation picked up from 1.7% to 2.0% according to finalized figures. This was in line with prelim figures.

French consumer prices increased by 0.1%, which was down from a prelim 0.2%. Consumer prices had risen by 0.6% in the month of March. The annual rate of inflation ticked up from 1.1% to 1.2% in April.

In March, Eurozone industrial production rose by 0.1%, month-on-month, following a 1.2% decline from April. Economists had forecast a 0.7% increase.

When compared with March 2020, industrial production was up by 10.9%, falling short of a forecasted 11.6 increase. In February, production had fallen by 1.8% year-on-year.

For the week, the EUR slipped by 0.21% to $1.2141. In the week prior, the EUR had risen by 1.21% to $1.2166.

The CAC40 and the EuroStoxx600 fell by 0.01% and by 0.54% respectively, while the DAX30 ended the week up by 0.11%.

For the Loonie

It was a quiet week.

Manufacturing and wholesale sales figures for March were in focus at the end of the week.

The stats had a muted impact on the Loonie, however.

While the stats had a muted impact on the Loonie, BoC Governor Macklem pegged back the Loonie.

Following the BoC’s hawkish sentiment, Macklem looked to ease market expectations of a near-term rate hike. Macklem clarified that interest rates would remain unchanged until inflation was sustainably at the 2% target.

In the week ending 14th May, the Loonie rose by 0.24% to C$1.2104. In the week prior, the Loonie had risen by 1.26% to C$1.2100.

Elsewhere

It was a bearish week for the Aussie Dollar and the Kiwi Dollar.

In the week ending 14th May, the Aussie Dollar fell by 0.93% to $0.7771, with the Kiwi Dollar ending the week down by 0.38% to $0.7250.

For the Aussie Dollar

It was a quiet week.

Economic data included business confidence and finalized retail sales figures.

A marked pickup in business confidence delivered Aussie Dollar support early in the week.

The NAB Business Confidence Index increased from 15.0 to 26.0.

While revised down from prelims, retail sales rose by 1.3% in March, which was also Aussie Dollar positive. In February, retail sales had fallen by 0.8%.

The stats were not enough to deliver a weekly gain for the Aussie Dollar, however.

For the Kiwi Dollar

It was also a quiet week.

Early in the week, electronic card retail sales impressed, rising by 4% in April.

Business PMI figures reflected a softening in private sector activity, however. In April, the Business PMI fell from 63.6 to 58.4. While back down to sub-60 levels, it was the 2nd highest PMI since July 2020.

For the Japanese Yen

It was also a quiet week.

Household spending figures were in focus early in the week, which were skewed to the positive.

In March, household spending jumped by 7.2%, following a 2.4% rise in the month of February. Year-on-year, spending was up by 6.2%. In February, spending had been down by 6.6% when compared with February 2020.

The Japanese Yen fell by 0.69% to ¥109.35 against the U.S Dollar. In the week prior, the Yen had risen by 0.65% to ¥108.60.

Out of China

It was a relatively quiet week on the data front.

Inflation figures for April were in focus early in the week.

Aligned with market expectations, inflationary pressures were on the rise going into the 2nd quarter.

The annual rate of inflation picked up from 0.4% to 0.9% in April. Wholesale inflation figures pointed to a further pickup near-term. The producer price index increased by 6.8%, year-on-year, which was up from a 4.4% rise in March.

In the week ending 14th May, the Chinese Yuan slipped by 0.06% to CNY6.4371. In the week prior, the Yuan had risen by 0.64% to CNY6.4332.

The CSI300 rose by 2.29%, while the Hang Seng ended the week down by 2.04%.

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