Macro Review & Outlook for w/c 28 May 2018

by Kim | May 28, 2018

A summary around our key themes for last week (w/c 21 May):-

• FOMC – Signalling on rates from minutes & speeches
  • No additional rate hikes this year (expect two, rather than three more rate increases), Fed outlook and policy stance hasn’t changed
  • Most speeches this week reinforced that Fed will tolerate inflation above 2% for a time
  • Econ data tracking in line; no reason to think performance above/below expectations
  • Key considerations: inflation just reaching 2% now, continued wage growth, some business uncertainty with regard to trade, shape of the yield curve (future growth expectations “sluggish”)
  • Neutral rate: somewhere between 2.25-2.75%. Several speeches highlighted moving to that level and then seeing how the economy develops
• US data – PMI, regional survey’s and durable goods (ex-transport) showing continued expansion. A key theme is rising cost price pressures, some optimism about ability to pass higher costs on.
• Europe – German and European PMI’s continued to slow (expanding at a lower rate), ECB remaining accommodative, core inflation still subdued and has not shown an upward trend yet. Brexit and trade uncertainties.
• UK – slower GDP growth, flat retail sales, inflation moderating (positive), BoE concerned about Brexit, remaining accommodative.
• Japan: Tokyo Inflation continues to moderate, in line with slowing inflation and growth

For all the detail – download the full report:

Weekly Macro Review 21May2018

Another big week ahead with global growth and inflation remaining in focus:- 

• US growth, employment and inflation
• EU Inflation, employment
• German retail sales and CPI
• Canada – GDP and BoC rates decision

On the central bank (US) liquidity front this week its month end. Note and bond settlements, Fed holdings mature and Fed balance sheet reduction on 31 May 2018.

Full details of the calendar:

Weekly Macro Brief 28May2018

Feedback is welcome – please send any comments or questions to kim.mofardin@marscapitalpartners.net

NEW MCP Macro Briefings

by Kim | May 23, 2018

We will commence posting two additional notes each week – a weekly macro brief and a weekly macro review. These notes are not designed to be deep-dive analytical pieces, but instead, provide a guide as to major events and round up of economic performance as related to the markets and key themes that we are following.

Our focus overall:

• Central banks; US liquidity, US Fed normalisation and rates signalling
• Macro context; identify whether data are confirming or challenging views on key themes including growth and inflation
• Alignment with current market analysis

Each week we will post:

• The Weekly Macro Brief – providing an overview of upcoming key events for the week including US Treasury issuance versus US Fed normalization, central bank speeches and key economic events. Posted at the start of the week.
• The Weekly Macro Review – a round-up of the important events, how they relate to key themes around growth, inflation and liquidity (with links to original sources). Posted at the start of the week.

I have posted the Weekly Macro Review for last week w/c 14 May 2018 and the Weekly Macro Brief for w/c 21 May 2018 (filled out with Monday and Tuesday data). The weekly reviews going forward will have an executive summary of how the data relates to key themes and dovetails into our market analysis.

Weekly Macro Review 14May2018

Weekly Macro Brief 21May2018

Comments and feedback are welcome.

kim.mofardin@marscapitalpartners.net