This week, the US April CPI will become the biggest focus. The performance of concept stocks among celebrities will also be disclosed one after another, including Alibaba, JD.com, Baidu, iQiyi, and others.
Last week, the international market was volatile, and the Bank of England hinted at considering interest rate cuts, leading to a turbulent situation in the Middle East.
In terms of overseas markets, the US stock market has regained its upward momentum, with the Dow Jones Industrial Average up 2.16%, the Nasdaq up 1.14%, the S&P 500 up 1.85%, and European stocks rising significantly. The FTSE 100 index in the UK rose 2.68%, the DAX 30 index in Germany rose 4.28%, and the CAC40 index in France rose 3.29%.
There are many highlights this week, with external concerns about whether US inflation has started to fall after three consecutive months of exceeding expectations. Federal Reserve Chairman Powell will make another appearance. US retailers will release their performance intensively, and the financial reports of Chinese concept stocks such as Alibaba and JD.com will also be released.
(‘Many officials from the Federal Reserve will give speeches this week (source: Xinhua News Agency image)’,)
Can US inflation cool down
After the weaker than expected US employment data in April, expectations for the Federal Reserve’s interest rate cut have rebounded,
The latest speech by Federal Reserve officials in the new week will attract a lot of attention. Powell will communicate with Klaas Knot, the Governor of the Dutch Central Bank, at the annual meeting of the Overseas Bankers Association held in the Netherlands. In addition, the statements made by several local Federal Reserve chairpersons and Federal Reserve directors regarding monetary policy and economic prospects are also worth paying attention to. The Vice Chairman of the Federal Reserve responsible for regulation, Barr, will attend a congressional hearing on financial regulation.
The April Consumer Price Index (CPI) released this week in the United States will be the biggest focus, as a fall in prices can alleviate the pressure on the Federal Reserve’s policy decisions.
Prior to the release of CPI, US Producer Price Index (PPI) data will show changes in upstream inflationary pressures. In addition, retail sales data for April will provide clues to whether the US economic momentum will continue, expected to decrease from 0.7% in March to 0.4%. Indicators such as industrial production, new home construction, construction permits, and initial unemployment claims in April are also worth paying attention to.
The US stock market’s earnings season entered the middle and late stages. This week, the companies that deserve attention include retailers Wal Mart, Home Depot, technology stocks Cisco, and Applied Materials.
The performance of concept stocks among celebrities will also be disclosed one after another, including Alibaba, JD.com, Baidu, iQiyi, and others.
Crude oil and gold
Crude oil futures have fluctuated widely, as investors weigh supply risks in the Middle East and global demand prospects. The WTI crude oil near month contract rose 0.19% to $78.26 per barrel, while the Brent crude oil near month contract fell 0.20% to $82.79 per barrel.
The US Energy Information Agency (EIA) reported last week that commercial crude oil inventories in the United States unexpectedly decreased by 1.4 million barrels. “Stronger refining activities and exports have encouraged a slight decline in crude oil inventories, helping to alleviate last week’s inventory pressure,” said Matt Smith, Chief Analyst at Kpler in the United States
“Brent crude oil prices have rebounded due to the very tense situation in the Middle East. On the other hand, the price decline has made it increasingly difficult for OPEC+member countries to gradually cancel voluntary production cuts as currently planned by the end of June,” wrote Carsten Fritsch, a commodity analyst at Commerzbank in Germany, in a report
The international gold price has reached a new high in nearly three weeks, and the expectation of the Federal Reserve cutting interest rates this year has boosted the market. The COEMX gold futures for May delivery on the New York Mercantile Exchange rose 2.97% for the week to $2367.30 per ounce, breaking through the $2380 mark during trading, the highest point since April 22.
Lukman Otunuga, Market Analysis Manager at FXTM, said, “The weak US economy has boosted interest in precious metals, and given that prices are only 2% away from historical highs, a new record may be about to emerge. Market attention is turning to the upcoming Consumer Price Index report, which may affect expectations for the Federal Reserve’s policies in the second half of 2024. Any evidence of cooling could stimulate pricing for this year’s decline in US interest rates.”
Rania Gule, a market analyst at brokerage firm XS, believes that after the number of first-time jobless claims in the United States surged to its highest level in months, investors now have hope for the Federal Reserve’s interest rate cut, as the outside world sees some signs of recession, and such development may provide a driving force for gold.
UK salary data may strengthen hopes of interest rate cuts
After the Swedish central bank lowered interest rates,
The Chief Economist of the European Central Bank, Ryan, stated last week that policymakers should be more confident that inflation is moving towards the target of 2% after the latest economic data is released, which will boost hopes for a rate cut at the next meeting in June. He reiterated that future decisions will depend on data and emphasized that policymakers should not exaggerate the influence of the Federal Reserve when considering the next steps of the European Central Bank, as it appears that the Federal Reserve may maintain higher interest rates for a longer period of time.
The industrial sector in the Eurozone has recently shown weak performance, and industrial output data for March this week will be monitored. France’s first quarter unemployment data and Germany’s latest ZEW survey in May will also reflect the performance of the two major economies.
The Bank of England held its key interest rate at 5.25% for the sixth consecutive time last week, but two out of nine members of the Monetary Policy Committee voted in favor of a 25 basis point rate cut. This is a new sign that a policy shift may be approaching. The Bank of England predicts that economic growth will become even stronger in the coming months, and the inflation rate will fall from the current 3.2% to the target of 2% in the coming months.
This week, the UK will release employment data for March, and investors may be particularly concerned about whether wage growth will further slow down, as predicted by the Bank of England. Therefore, if wages decrease, the market may begin to evaluate the possibility of a rate cut in June.
Highlights of this week
