This Week Focus Point 16-20 May 2022
Trouble on the stock market might not be over yet. Investors are still looking for more information about the Fed’s plans for monetary policy and are keeping an eye on the earnings results of big retailers. The most important things happening in the US will be retail sales, housing data, and speeches by several Fed officials. In other places, the UK, Canada, and Japan’s inflation rates will be closely watched.
Traders in the US will pay close attention to speeches given by Fed officials, including Fed Chair Powell’s speech at a Wall Street Journal conference. Also, retail sales should show that consumer spending went up in April. However, new data on industrial production, the NY Empire State Manufacturing Index, and the Philadelphia Fed Manufacturing Index will likely show that the industrial sector is slowing down. Also, data from housing starts, building permits, existing home sales, and the NAHB Housing Market Index will likely show that the housing market is cooling. The earnings season will keep going, with Walmart, Home Depot, Target, Cisco Systems, Lowe’s, and Deere among the big companies that will report.
In other parts of America, it will be interesting to see how Colombia, Chile, and Peru’s consumer and producer inflation and GDP growth compare to Canada’s.
This week will be a busy one in the UK. There will be a lot of news about the country’s economy from a variety of sources. Last month, consumer inflation probably went up to 9.1%, which would be the highest rate since at least 1991. The unemployment rate is expected to stay at a 3-year low of 3.8%, and wage growth is likely to have stayed high, which is another sign that consumers’ living standards are getting lower. Also due are retail sales, labor productivity, and the Gfk consumer confidence. Traders will also keep an eye on Monday’s BoE Monetary Policy Report hearing in front of the Treasury Committee. Governor Bailey will be there.
In other parts of Europe, Russia is expected to release its GDP numbers for the first quarter. This will give a first look at how the war with Ukraine and the sanctions have affected the country. Traders will also keep a close eye on the new Spring Forecasts from the European Commission. The meeting minutes from the ECB and a speech by President Christine Lagarde in Darmstadt, Germany, could give more information about how the central bank plans to fight inflation. The focus will also be on Germany’s wholesale and producer prices, France’s unemployment rate for the first quarter, and Italy’s trade balance.
Japan needs to report on its GDP, trade, and inflation. The Japanese economy is expected to shrink by 0.4% in the first three months of 2022, after growing by 1.1% in the previous quarter. This is likely due to the effect of restrictions on public spending and exports put in place to stop the Omicron wave on public health.
In China, the People’s Bank of China will meet twice this week. Both the medium-term lending facility and the key loan prime rates are likely to stay the same, as the central bank tries to find a balance between a weak yuan and an economy that is slowing down. The country also releases information about industrial production and retail sales for April.
In Australia, the unemployment rate probably hit a new record low of 3.9% in April. Also, the country has federal elections, and according to the most recent polls, Australia’s Labor Party could win a majority. There will also be a lot of attention on Thailand’s GDP and the Philippines’ interest rate decision.