May 16, 2022

Holiday-shortened but busy week

Holiday-shortened but busy week

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The week ahead, although holiday-shortened, is busy and loaded with economic events.

Rising Inflation, rising rates, war; It seems that markets are beginning to accept this negative news triptych as they are already banking on a resolution to the war in Ukraine.

Inflation continues to be a key topic, and the first-quarter earnings season is getting underway. We will also see the impact of the rising cost of living on politics with the French presidential election on Sunday.

Economists expect data to show annual red-hot U.S. inflation, rising at its fastest pace in 40 years. Forecasts show that it may have topped 8% in March. A strong reading would bolster the case for more aggressive rate hikes.

The data, to be published by the Bureau of Labor Statistics at 8:30 am Eastern Time, reflect the immediate aftermath of Russia’s invasion of Ukraine.

Aside from the CPI numbers, the U.S. is set to release data on producer price inflation on Wednesday.

However, despite an apparent global macro slowdown, there are indicators that the economy is not exactly doomed.

Last week, Bank of America Securities published a paper citing that the outlook for US consumers is encouraging.

In recent weeks, expectations for earnings growth have largely held up, despite the first quarter that saw commodities prices surge. 

Three major central banks are also on tap, with interest rate announcements coming from the Bank of Canada, New Zealand and the European Central Bank. Central bank meetings will underline the worldwide effort to contain inflation.

On the Frech election front, President Emmanuel Macron beat far-right challenger Marine Le Pen in the first round of presidential voting.

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*PLEASE NOTE The information above is not investment advice.

Sources: Reuters, Investing, CNN money