U.S. Market Overview:
Over the last week, the Producer Price Index (PPI) in the U.S. market has inflated by 0.5% for the month of April. This figure was significantly higher than the estimated 0.2% and the previous month's revised figure of negative 0.1% (revised from 0.2%). Core inflation and inflation figures have remained in line with expectations at 0.3% on a month-on-month basis. Year-over-year, prices increased by 3.6% for core inflation and 3.4% for overall inflation. Retail sales, however, showed no growth, falling short of analysts' estimates of 0.3% and the previous month's growth of 0.6% (revised from 0.7%).
We can be sure that the pesky inflation figures from the U.S. market could further extend the Fed's current stale. With a weaker GDP, retail sales, and labor market, we can be certain that there won’t be any rate hikes from this point. The rest remains a mystery to unfold. However, given the current facts, my expectation is to keep the rates constant at the June meeting as well.
Looking ahead into this week, we have the FOMC minutes on May 22nd should provide more clarity on the Fed’s perspective. No other significant economic events are anticipated in the coming week that could alter the economic course.
India Market Overview:
In India, both the Consumer Price Index (CPI) and Wholesale Price Index (WPI) inflation figures have been slightly higher than analysts’ expectations. The CPI increased by 0.48% month-on-month and 4.83% year-over-year for April. The WPI increased by 1.26% year-over-year. It is important to note that the inflation figures from the National Statistical Office (NSO) and the Office of Economic Advisor may not clearly represent the ground reality, as the ground reality perceived by Indian consumers often differs from the actual basket used.
Coming up this week, there aren’t any significant statistics coming out which would affect the course of economy. However General elections may continue to keep the markets volatile.
Date : 19th May '24; Source - Trading Economics
LR