China's Recovery Falls Short of Expectations

China’s economic growth is falling short of economists’ expectations, putting pressure on the yuan and raising questions about the sustainability of the national and global economies.

US Default: If the US Government Runs Out of Money, What Direction Will the Markets Take?

Who would have thought that we would ever see a time during our lives in which it could be possible for the United States, the world’s commercial and economic superpower since the industrial revolution, to potentially run out of money?

Will Australia's Labor Data Tempt RBA to Hike Again?

Despite the Reserve Bank of Australia (RBA) saying at its May meeting that more rate increases may be required, investors are nearly convinced that it will take no action at the June gathering, and evenly split on whether another 25bps may be warranted in August or September. So, to get a better sense of how the RBA may proceed henceforth, they may pay close attention to wage growth and employment data, due out on Wednesday and Thursday, respectively.

RBA: Minutes to May Board Meeting Make Strong Case to Justify Rate Increase

We still expect that the Board will choose to pause at the next Board meeting on June 6. But the case for further near-term rate increases cannot be dismissed. The concerns the Board has around the risks to its inflation target are understandable but so are the signals around the sharp slowdown in spending and the likely feedback this will have on inflation and labour markets.

Canada: Inflation Takes a Breather from its Downward Trek in April

Headline inflation took a breather on it's trek down the mountain in April thanks to surging gasoline prices. We expect the pause will be temporary and inflation will resume heading lower in the months ahead. As outlined in our March forecast, we expect core inflation to continue to decelerate below 3% y/y in the second half of the year, as does the Bank of Canada.

Sunset Market Commentary

The UK labour market report displayed strength in the first quarter by adding 182k jobs (160k expected) compared to the 2022Q4. The unemployment rate unexpectedly edged up, from 3.8% to a still historically low level of 3.9%. Wage growth accelerated slightly to 6.7% y/y in Q1. This news suggesting a very tight labour market was counterbalanced by the accompanying preliminary job growth estimate for April.

US: Retail Sales Rise in April for the First Time in 3 Months

Retail sales rose 0.4% month-on-month (m/m) in April, roughly half the consensus forecast calling for an increase of 0.8% m/m. March's reading was revised up, changing last month's decline to -0.7% (previously -1.0%). Most of these revisions were due to the release of the 2021 Annual Retail Trade Survey on April 24th which is used as a benchmark for the monthly data.

Pound Ignores Lousy News, Including Labour Market

The UK labour market is deteriorating at an increasing rate. Data released this morning showed that jobless claims rose by 46.7k in April, following a 26.5k increase in March. Analysts had, on average, expected a rise of 31.2k.

US Debt Ceiling Stalemate Remains Firmly in Place

The US debt ceiling stalemate remains firmly in place with US Treasury Secretary Yellen’s warnings proving futile for the moment. Apart from the US T-Bill and CDS market, the overall market impact remains low even as we’re only a fortnight away from the assumed “X-date”. Previous debt ceiling episodes learnt that a solution will eventually follow. Today’s eco calendar is extremely thin with only US housing starts and building permits.

Bitcoin and Ether Supported on Dips But Look Vulnerable

Bitcoin rallied at the start of Wednesday’s US session but unexpectedly plunged $1400 or 5% to $26.7K mid-session. This short-term dip shows continued demand for Bitcoin on dips below $27.5K.