FUNDAMENTAL REVIEW FOR THE WEEK (May 13 - May 17, 2024)

The past week passed without a pronounced trend. The main reason is the absence of significant fundamental events in the economic calendar and the presence of a fairly large number of national holidays in it.

The banks of Australia and England, in general, met within the framework of the forecast - without any major surprises. The only thing worth noting is the appearance of a new “dove” on the board of the Central Bank of England during the voting. This threw a little of the “cable” down, but not significantly. Bailey is waiting for a sustained decline in inflation before he picks up the betting scissors. So far we are not ready here and now, although they note certain positive dynamics in this direction. A passing, neutral meeting, to put it simply.

The new five-day week will be more active and can easily be dubbed “the week of inflation.” Consumer price data will be released for many of the world's key economies, including the US (Wednesday) and Germany (Tuesday). How important are US inflation reports for April?

In the medium term, from the point of view of the Fed members' forecasts for rates at the meeting on June 12, they are not critical, because the nonfarm for May will be released before the meeting, and US CPI inflation for May will be published on the day of the Fed meeting. That is, Fed members will receive updated price data right before the meeting and will be able to make adjustments to them “on the fly.”

Also, we have not yet discounted the industrial inflation of the stars and stripes on Tuesday; of course, it is inferior in terms of the influence of consumer inflation, but it will also be interesting. And unlike CPI, the data here is forecast not at the level of the previous period, but in the growth of the indicator, which in the moment can support the greenback if the forecast turns out to be correct. The reasons for the potential increase in commodity prices are still the same - problems in the Red Sea and, as a consequence, an increase in the cost of transporting energy resources.

At the same time, many of the world's leading banks and everyone believe that CPI will be lower than the forecast and previous periods due to a decrease in the rate of consumption among the population, which in turn forces manufacturing companies to reduce prices. This is eloquently emphasized by the recently released US PMI report, which recorded a sharp drop in prices in the services sector.

To summarize what has been said, “helicopters” may fly into the market and throw prices in both directions, based on incoming data, in general, as always, we keep our finger on the pulse of the market with us, dear subscribers.

Good luck and informed investment decisions!