Over the last week in US, the economy’s GDP for Q1 2024 expanded by only 1.3% annualized rate, much lower than the forecasted 1.6% and also it is the lowest since two consecutive negative growth quarters in 2022. The Core PCE for April increased by 0.2%, in line with estimates, while personal income and consumption data came out at 0.3% and 0.2%, respectively. Personal income growth cooled from 0.5% in March and meets the analyst estimate. The personal spending in April has also slowed from 0.7% (revised from 0.8%), falling short of the expected 0.4%.

These consumption-driven indicators and GDP shows the pressure on the economy due to the high interest rates and showing signs for rate cuts. But the durable goods and inflation data suggest maintaining higher rates is justified.

This week, the Manufacturing PMI is released on June 3 (Monday) and the Services PMI on June 5. These indicators reflect the health and performance of their respective sectors. Analysts expect the Manufacturing PMI to be at 50 and the Services PMI at 51 points.

Additionally, labor market figures will be released, with JOLTS openings on June 4 and other indicators like NFP and the unemployment rate on June 7 (Friday). The NFP is expected to show 151K new jobs, with the unemployment rate steady at 3.9%.

Turning to the Indian economy, last week showed a robust 7.8% GDP growth, exceeding analyst expectations of 6.7%. Looking ahead, general election results are due on June 4 (Tuesday). Exit polls suggest the ruling party will likely continue, which is expected to positively impact the market. However, an unexpected outcome could significantly shift market sentiment. Following this, the RBI’s interest rate decision is on June 7 (Friday), with rates expected to remain steady at 6.5%.

Date : 02nd June '24; Source - Trading Economics

LR