Fisher Investments recaps the biggest market, political and economic news from last week, including May US inflation data, UK and China May Purchasing Managers' Indexes (PMIs) and the third estimate of eurozone Q1 2022 GDP
In the US, April exports rose 3.5% m/m while imports declined 3.4% m/m. May consumer prices increased 1.0% m/m and 8.6% y/y—higher than forecast. May core consumer prices (excluding food and energy) rose 0.6% m/m and 6.0% y/y. While we continue to believe inflation will moderate as the year progresses, the exact inflection point will be clear only in hindsight. Until then, inflation data will likely continue to fluctuate as the economy normalizes away from COVID-driven consumption patterns and supply-chain bottlenecks ease. In our view, keeping realistic expectations and a long-term perspective will be key to navigating this period.
In the eurozone, the third estimate of Q1 2022 GDP growth was 0.6% q/q and 5.4% y/y—revised higher from previous estimates. Exports rose 0.4% q/q while imports fell 0.6% q/q. The European Central Bank left interest rates unchanged but indicated their intention to begin raising rates at their July meeting. In the UK, the final May S&P Global/CIPS Services PMI was revised higher to 53.4 (readings over 50 indicate expansion).
In Japan, preliminary May money supply (M2) increased 3.2% y/y. May bank lending rose 0.7% y/y. The second estimate of Q1 2022 GDP was revised up to -0.1% q/q and 0.4% y/y. In China, the May Caixin Services PMI came in at 41.4, below estimates. May exports and imports rose 16.9% y/y and 4.1% y/y respectively—both surpassing forecasts. Money supply (M2) expanded 11.1% y/y, above expectations. May consumer prices rose 2.1% y/y, below forecasts.
The Week Ahead:
The eurozone, UK and Japan report April industrial production, while the US and China report May industrial production. The US and China release May retail sales figures, while Japan releases April retail sales figures. Japan posts May trade data. The eurozone reports May inflation data. The US May Leading Economic Index is announced. The US Federal Reserve, Bank of England and Bank of Japan meet to set their respective monetary policies.
Source for all data cited is FactSet. This update constitutes the general views of Fisher Investments and should not be regarded as personalized investment advice. No assurances are made we will continue to hold these views, which may change at any time based on new information, analysis or reconsideration. In addition, no assurances are made regarding the accuracy of any forecast made herein. Global equities are represented by the MSCI World Index. The MSCI World Index measures the performance of selected stocks in 23 developed countries and is presented net of dividend withholding taxes and uses the maximum rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. Past performance is no guarantee of future results. A risk of loss is involved with investments in stock markets.