Global Markets Digest: Key Economic Indicators and Insights
Yesterday, global markets focused on macroeconomic data, particularly employment and PMI figures. In the US, weekly jobless claims for the week of May 18th came in slightly below market expectations at 215,000, while the previous week's figure was revised upward to 223,000. Continuing claims were 1.794 million for the week of May 11th, consistent with the previous month. The S&P Manufacturing PMI for May blew past market expectations, soaring above the contraction zone to 50.9. The Services PMI was a whopping 4.8 points higher than anticipated at 54.8, and the Composite PMI came in at 54.4. April housing sales fell by 4.7% on a monthly basis to 634,000 units. In the Eurozone, the Manufacturing PMI improved to 47.4, above the market expectation of 46.1, although it remained in contraction territory. The Services PMI was slightly below market expectations at 53.3, consistent with the previous month, while the Composite PMI rose from 51.7 in April to 52.3.
Atlanta Fed President Raphael Bostic stated that more time is needed before considering an interest rate cut, emphasizing that upward inflation risks remain a concern. He noted that they are not yet confident about reaching the target inflation level and are still worried. Bostic also mentioned that the continued strength in the labor market indicates that the economy still has significant momentum.
In Asian markets, Japan's CPI data had a significant impact. Japan's national CPI for April rose by 2.5% year-over-year, slightly above the market expectation of 2.4%. Core CPI, excluding food, matched market expectations at 2.2%, down from the previous month. Core CPI, excluding food and energy, also matched expectations, declining to 2.4% from the previous month.
In the US futures market, the trend is slightly positive. The 10-year Treasury yield in the US trades at 4.47%, while the 2-year Treasury yield is at 4.93%. The volatility index, which measures market turbulence, saw an increase, climbing from 12.29 to 12.78.
WTI crude futures stabilized near $77 per barrel on Friday, but they are still set to drop more than 3% this week. This is due to stronger-than-expected US PMI data, which has reduced bets for Federal Reserve interest rate cuts this year and has hurt the outlook for the US economy and demand for energy.
Today, key data releases to watch include durable goods orders, the University of Michigan consumer sentiment index, and the Kansas City Fed services activity index. Durable goods orders are on track to decline by 0.7% in April, following an increase of 2.6% in March. The University of Michigan consumer sentiment index will likely rise to 67.7 in May. The April reading was 67.4. The Kansas City Fed services activity index was at 9 in April.