Bassanese Bites: Monthly CPI mayhem – June 24 2024
Global markets – week in review
Global stocks inched further ahead last week as soft US retail spending supported hopes for eventual US rate cuts.
There was limited key global data last week, with the highlight being US retail spending which surprised on the soft side. Headline spending rose only 0.1% in May, partly reflecting weaker petrol prices – though spending was also soft in a range of other areas. All up, the result provides further tentative evidence that the US consumer juggernaut may be slowing.
Key Chinese monthly data was mixed, with better-than-expected retail spending in May though weaker-than-expected industrial production and fixed-asset investment. In short, China’s economy continues to muddle along. Also muddling along is the New Zealand economy, with a better-than-expected – though still soft – 0.2% gain in Q1 GDP, which at least suggests the economy is dragging itself from outright recession.
The week ahead
By far the major global highlight this week will be the May US private consumption expenditure (PCE) deflator – the Fed’s preferred inflation measure. After benign consumer and producer price index reports for May, markets are now expecting a very encouraging 0.1% gain for the core PCE on Friday. If realised, this would pull down annual core inflation from 2.8% (where it has been stuck for three months) to 2.6%.
