The latest batch of US PPI data hit the newswires yesterday. Following in the footsteps of CPI figures a couple of days prior, the report also pointed to lower inflation across the board, surprising markets with a 0.5% drop in the PPI as opposed to an expected 0.2% increase. The implication is that producer prices actually fell in April compared to the previous month, once again challenging the Fed’s narrative of high inflation risks. Despite this, FedWatch has yet to budge an inch, still overwhelmingly predicting a rate hold at the next meeting in June. In other economic news, US retail sales came in higher than expected on Thursday, while jobless claims largely fell in line with predictions.
There is a subtle but noticeable shift among the doomsayers who have been predicting economic carnage for the US and indeed the world at large. More recently, such voices have reconsidered their stance and have adjusted growth forecasts to the upside. Among them, Barclays are now no longer predicting a recession for the US economy in the latter half of the year. Over at Blackrock, a senior member stated that the shift was “a clear appreciation by the market that some of the worst fears were maybe overly priced into the market”. Of course, the newfound confidence rests heavily on the establishment of new trade deals between the US and its trading partners, which will take many months to fully set in stone.
Given the lack of momentum in markets over the last couple of days, it seems that many traders have already packed it in for the week. The only exception is gold, which closed 2% higher yesterday but not before sweeping the lows of $3,120 an ounce in an apparent hunt for stop-losses. While the softening trade situation will do nothing to promote the case for gold, the prospect of lower interest rates on the Dollar potentially will.
Эрсдлийн дохио : Худалдааны дериватив ба хөшүүрэг бүтээгдэхүүн нь өндөр түвшний эрсдэлтэй байдаг.
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