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Trends & Analysis
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Crude oil spikes on US inventories report

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Does Apple have more room to run?

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Gold spikes to new highs on Fed remarks

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GBP/USD price may correct lower

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Trends & Analysis
News

Crude oil spikes on US inventories report

News

Does Apple have more room to run?

News

Gold spikes to new highs on Fed remarks

News

GBP/USD price may correct lower

News

Goldman Sachs’ stock surges on upbeat Q2

News

Caution ahead of Netflix’s earnings?

Weekly Market Preview

Week Ahead Preview:

27th of May

 

Friday, May 24, 2024

Last week, major U.S stock indices declined as market expectations shifted regarding the Federal Reserve’s potential interest rate cuts. Initially, there was speculation that the Fed might cut rates in the third quarter of this year, but strong U.S. economic data has pushed these expectations to the fourth quarter. The Purchasing Managers’ Index (PMI) data released last Thursday showed the manufacturing index for May at 50.9, exceeding the expected 50.0, while the services PMI was particularly surprising, rising to 54.8 against an expectation of 51.3. The strength of this data has reduced the odds of a rate cut at the Federal Reserve’s September meeting.

This week, investors will gain more insight into the Fed’s monetary policy direction with the release of the April Personal Consumer Expenditure Index, the Fed’s preferred measure of inflation. Expectations suggest the YoY headline PCE for April will remain stable at 2.7%, and the YoY core PCE will steady at 2.8%. Any higher-than-expected data would indicate challenges in controlling inflation, implying that the current monetary policy may remain unchanged for a longer period, as suggested by some Federal Reserve members, as the current interest rates has been less effective in slowing down economic activity compared to previous economic cycles.

Additionally, markets are anticipating the initial reading of European inflation levels for May. The YoY headline CPI is expected to increase from 2.4% in April to 2.5% in May, while the YoY core CPI is projected to remain stable at 2.7% in May. Any higher-than-expected figures would affect the likelihood of the European Central Bank cutting interest rates beyond the June meeting, and could reduce the anticipated number of rate cuts this year, if inflation remains significantly above its 2% target.

 

Economic Data Highlights (As per UAE time) 

 

Monday 27th of May
  • EUR- Ifo business climate (Germany- May)
  • Fed Williams speech
Tuesday 28th of May
  • AUD- Retail sales (Apr)
  • USD- Consumer confidence (May)
  • Fed members Kashkari, Bowman & Mester speeches
Wednesday 29th of May
  • JPY- Consumer confidence (May)
  • EUR- JfK consumer confidence (Germany- May)
  • EUR- Inflation rates (Germany- May)
Thursday 30th of May
  • CHF- GDP (Q1)
  • EUR- Unemployment rate (Apr)
  • EUR- Consumer confidence (May)
  • USD- GDP (Q1)
  • BoE Gov Bailey speech
Friday 31th of May
  • JPY- Unemployment rate (Apr)
  • JPY- Retail sales (Apr)
  • CNY- Manufacturing and services PMIs (May)
  • EUR- Inflation rates (May)
  • CAD- GDP (Q1)
  • USD- Inflation rates (Personal Price Index report – PCE- Apr)

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