|
What happened last week?
Rising tensions in the Middle East affected market performance. Israel’s attack on Iran’s nuclear installations and military leadership, and Iran’s predictable response caused stocks, oil and gold to react. Stocks were down sharply on Friday, except for energy stocks as oil jumped, as did gold. The concern that the conflict spreads beyond the two countries to a regional conflict underlies negative market sentiment.
Prior to the end of the week, the U.S. Bureau of Labor Statistics (BLS) provided some optimistic news. The BLS announced that consumer inflation had cooled last month. The Consumer Price Index (CPI) rose 0.1 percent in May after increasing 0.2 percent in April. Over the last 12 months, the all-items index increased 2.4 percent before seasonal adjustment, up slightly from 2.3 percent in April. Both April and May are close to the Federal Reserve’s goal of 2 percent long-term average consumer inflation.BLS CPI release
The next day, the BLS reported that the Producer Price Index also rose 0.1 percent in May, after falling 0.2 percent in April. On an unadjusted basis, the index for final demand prices rose 2.6 percent for the 12 months ended in May. The index for services inched up 0.1 percent, and prices for goods rose 0.2 percent last month. BLS PPI release
Trade turmoil, tariffs and tariff threats from the Trump administration have not affected prices and inflation, yet. The consensus among economists from banks and financial firms predicts that it is a matter of time before inflation raises prices. Depending on the goods affected tariff driven price increases require five months, or in some cases twelve to eighteen months, to take effect. NYTimes, tariffs and inflation
What's ahead for this week and beyond?
In Canada, housing starts, New Housing Price Index, Raw Materials Price Index, Industrial Producer Price Index, retail sales, and the Bank of Canada’s Summary of Deliberations from its most recent interest rate announcement will be released.
In the U.S., building permits, housing starts, retail sales, Import Price Index, Export Price Index, capacity utilization, industrial production, manufacturing production, business inventories, retail inventories, and the Federal Reserve’s interest rate decision and Summary of Economic Projections will be reported.
Globally, China’s house prices, industrial production, unemployment rate, retail sales, People’s Bank of China prime rate, Japan’s imports, exports and trade balance, Consumer Price Index (CPI), and Bank of Japan’s Monetary Policy Statement and interest rate decision, and Eurozone’s wages, labour cost index, consumer inflation indicators, and European Central Bank’s Economic Bulletin will be released.
The G7, Group of Seven, meeting in Canada will include members Britain, Canada, France, Germany, Italy, Japan and the United States, and invited leaders from Australia, Brazil, India, Mexico, South Africa, South Korea and Ukraine, plus the head of NATO.
|