This Week Focus Point 9-13 May 2022

This Week Focus Point 9-13 May 2022

As investors wait for new inflation data and keep an eye on bond yields, the stock market is likely to stay volatile, like it did last week. Also being closely watched are the speeches of Fed officials, the sentiment of US consumers, the UK’s GDP data for March, and the industrial production data for the eurozone. Lastly, China will have a busy week, with inflation data and trade data being the most important things to look at.

In the US, the annual inflation rate is expected to have dropped to 8.1 percent from a 41-year high of 8.5 percent in March. The core rate is also expected to have dropped from 6.5 percent to 6 percent. Still, inflation isn’t likely to go back to where it was before the pandemic any time soon, and it will stay above the Fed’s 2 percent target for a long time as long as supply problems continue and energy prices stay high. A number of speeches by Fed officials will also be closely watched by investors. Also coming out are producer prices, trade price indexes, a preliminary reading of Michigan consumer sentiment, consumer inflation expectations, and the NFIB Business Optimism Index. While this is going on, Tyson Foods, BioNTech, Peloton, Walt Disney, Wendy’s, and AMC Entertainment are all set to report their earnings.

In other parts of the United States, it will be interesting to keep an eye on the CPI reading, industrial production, and monetary policy decision in Mexico, as well as the inflation rate and retail sales in Brazil.

The UK will release the first estimates of its GDP and business investment for the first quarter, as well as its foreign trade balance, industrial production, and construction output for March. The British economy probably grew by 1% in Q1. This is less than the 1.3% growth at the end of last year, which was caused by a drop in household incomes.

In other parts of Europe, like the Euro Area, factory activity probably went down in March, when most of the effects of the war in Ukraine began to show. Also, the mood of German investors is likely to drop for the third month in a row in May and stay at its lowest level since March 2020. The Eurozone Zew economic sentiment index, Germany’s final inflation figures, France’s foreign trade, Italy’s industrial activity, Turkey’s unemployment rate and industrial production, and Russia’s consumer price index are some of the other important data that will come next. As of April 29, Russia’s annual inflation rate was 17.73 percent, which is the highest it has been since 2002 and up from 17.70 percent a week before. After the central bank cut interest rates, the weekly rise in consumer prices slowed to 0.21 percent from 0.25 percent the week before.

In China, the inflation rate is expected to reach 1.9% in April, which is much lower than other major economies. This is because continued lockdowns and social separation policies have hurt demand. The world’s second largest economy’s trade data will also be front and center.

In India, there will also be trade and inflation data, but consumer prices are expected to rise by 7.5 percent in April, which is a much faster rate. Also, it will be interesting to see how the Philippines and Indonesia’s economies did in the first quarter despite large virus outbreaks in the first half of the quarter, and especially how Indonesia did thanks to the rally in commodities. Other important data comes from Australia’s consumers and businesses, Malaysia’s interest rate decision and job data, South Korea’s labor market data, and Japan’s March current account.