It was a busy week on the economic calendar for the week ending May 20, 2022.
A total of 60 stats were monitored, following 45 stats in the week prior.
Of the 60 stats, 32 beat forecasts, with 20 economic indicators falling short of forecast. Eight stats were in line with forecasts.
Looking at the numbers, 25 of the stats reflected an upward trend. Of the remaining 35 stats, 34 stats were weaker.
Out of the US
Early in the week, retail sales and industrial production figures eased fears of an economic meltdown.
In April, retail sales jumped 2.5%, with industrial production rising by 1.1%.
On Thursday, jobless claims and Philly Fed Manufacturing numbers disappointed, however.
Initial jobless claims rose from 197k to 218k, in the week ending May 13, with the Philly Fed Manufacturing Index falling from 17.6 to 2.6 in May.
While the stats were mixed, Fed Chair Powell tested investor sentiment on Tuesday.
After providing the markets with assurances about larger rate hikes in the week prior, the Fed Chair talked of a willingness to move policy beyond neutral to curb inflation. Powell also discussed some possible pain ahead for the labor market while acknowledging that the Fed should have lifted rates sooner.
In the week ending May 20, 2022, the Dollar Spot Index slid by 1.35% to end the week at 103.150. In the week prior, the Index rose by 0.87% to 104.563.
Out of the UK
Employment and wage growth figures impressed, with average earnings + bonus up 7% in March versus a forecasted 5.4%.
The unemployment rate slipped from 3.8% to 3.7%, with claimant counts supporting a positive outlook for April. In April, claimant counts fell by 56.9k, following a 46.9k decline in March.
Inflation figures tested support for the Pound mid-week, however, with another spike raising concerns over the economic outlook.
The annual rate of inflation accelerated from 7.0% to 9.0% in April, falling just shy of a forecasted 9.1%.
On Friday, retail sales beat forecasts to deliver Pound support following a Dollar sell-off on Thursday.
In April, retail sales jumped by 1.4%, reversing a 1.2% slide from March.
In the week, the Pound rallied by 1.78% to end the week at $1.2480. The Pound fell by 0.70% to $1.2262 in the week prior.
The FTSE100 ended the week down 0.38%, reversing a 0.48% gain from the previous week.
Out of the Eurozone
Early in the week, trade data and GDP numbers delivered mixed results.
In March, the Eurozone’s trade deficit widened from €7.6bn to €16.4bn, with the war in Ukraine continuing to hit crude oil prices.
Second estimate GDP numbers for the Eurozone were EUR positive, however. In Q1, the economy grew by 0.3%, up from a first estimate of 0.2%. Year on year, the economy expanded by 5.1%, up from a first estimate of 5.0%.
Finalized inflation figures for the Eurozone had a muted impact mid-week, with the annual rate of inflation easing from 7.5% to 7.4%.
At the end of the week, however, German producer prices for industrial goods surged by 33.5% compared with April 2021, the highest increase on record.
From the EU, downward revisions to economic forecasts failed to sink the EUR while weighing on the European equity markets.
For 2022, the European Commission forecasts growth of 2.7% and 2.3% for 2023. While the Commission revised both downwards, the 2022 revision was most marked.
In February, the European Commission forecast growth of 4.0% for 2022 and 2.7% for 2023.
From the ECB, the monetary policy meeting minutes provided few surprises, with the talk of summer rate hikes in line with market expectations.
For the week, the EUR rallied by 1.46% to $1.0564. In the previous week, the EUR slid by 1.32% to $1.0412.
The CAC40 slid by 1.22%, with the EuroStoxx600 and the DAX seeing losses of 0.55% and 0.33%, respectively.
For the Loonie
The key stats of the week were inflation figures for April, which were Loonie positive.
In April, Canada’s annual rate of core inflation picked up from 5.5% to 5.7% versus a forecasted 5.4%.
Other stats in the week included manufacturing and wholesale sales and RMPI numbers that had a muted impact on the Loonie.
A pickup in crude oil prices also delivered support.
In the week ending May 20, the Loonie rose by 0.69 to C$1.2840 against the greenback. The Loonie fell by 0.42% to C$1.2929 in the week prior.
The Aussie Dollar rose by 1.44% to $0.7040, with the Kiwi Dollar rallying by 1.88% to end the week at $0.6394.
For the Aussie Dollar
Wage growth and employment numbers drew interest in the week, with the stats Aussie dollar positive.
In Q1, wages grew by 0.8%, following a 0.7% rise in Q4.
Full employment jumped by 92.4k in April to leave the unemployment rate at 3.9%. Employment increased by just 4.0k, with part-time employment a drag.
For the Kiwi Dollar
A quiet week on the data front left wholesale inflation and trade data in focus.
The stats were Kiwi dollar positive. In Q1, the PPI Input Index jumped by 3.6%, following a 1.2% rise in the quarter prior.
In April, New Zealand’s trade balance rose from a NZ$581 million deficit to a NZ$584 million surplus, with exports to Japan leading the way.
For the Japanese Yen
It was a busy week on the economic front, with GDP, trade, and inflation figures drawing interest.
The stats were skewed to the negative, with weaker GDP and trade data confirming the Bank of Japan’s concerns.
In Q1, the economy contracted by 0.2% and shrank by 1.0%, year on year.
The trade deficit widened from ¥414.1bn to ¥839.2bn in April, while the annual rate of inflation jumped from 0.8% to 2.1%.
With economic uncertainty likely to linger, the pickup in inflation is unlikely to force the BoJ’s hand just yet.
The Japanese Yen rose by 1.04% to end the week at ¥127.88 against the dollar. In the week prior, the Yen ended the week up 1.03% to ¥129.22.
Out of China
Economic data disappointed in the week and raised market fears of a global economic recession.
In April, industrial production fell by 2.9% year on year versus a forecasted 0.4% rise. Production had risen by 5.0% in March.
Fixed asset investments also continued a downward trend.
Assurances of government support, however, limited the damage.
In the week ending May 20, the Chinese Yuan rose by 1.42% to CNY6.6930. The Yuan slid by 1.84% to CNY6.7893 in the week prior.
The Hang Seng Index ended the week up 4.11%, with the CSI300 rising by 2.23%.