The U.S. Dollar is trading in weaker ranges to start off the week.
Overview
Following a couple of days with nothing to offer except word from Fed officials who agree with the current status quo, we get some data to chew on in the next couple of days that could boost an argument for stimulus via rate cuts if the numbers suggest weakening. Inflation will be gauged for suppliers tomorrow with the release of April’s Producers Price Index, while the Consumer Price Index is out Wednesday. Beware of “Stagflation” talk if inflation shows to be sticky.
Retail Sales will come out on Wednesday as well, while Housing Starts and Building Permits are scheduled for Thursday. Outside of domestic concerns, the globe will we awaiting for Friday’s major sale of “ultra-long debt,” treasury notes out 20, 30, and 50 years. Markets have already reacted positively to the reports overseas. As China has struggled to come up economically as it had in the past, Xi Jinping’s government is hoping that this fiscal boost can represent a source of growth in Gross Domestic Product. This could prove to be a boost for other assets, with oil, copper, and iron ore prices already advancing.
What to Watch Today…
- CPI, Retail Sales Wednesday
- PPI Tuesday
- Japan GDP Thursday
- Monex USA Online is always open.
MXN ⇑
The Mexican Peso has climbed by 1.4% thus far in May, recovering big time after the latest inflationary numbers and the decision by the central bank, Banxico, to stay put and not cut. It is all helping Peso be at its strongest level over the Buck in a month. This week will be a dry one for numbers out of our southern neighbor in anticipation of a very impactful end of the month with figures covering Q1 Gross Domestic Product as well as Retail Sales and CPI.
EUR ⇑
The Euro is picking up a bit of steam as confidence seems to be resurging in the Ancient Continent. While we have documented that places such as Germany have escaped their stagnant and recessionary periods, economists are hoping it is just the start of a return to growth all across the Eurozone and beyond.
A Bloomberg poll revealed that analysts see more expansion for the year than originally thought. The 20 nations withing the Euro-zone should see growth of 0.7% for 2024. It is possible that in June we see a “hawkish rate cut” from the European Central Bank. Either way, the Euro is looking with room for further recovery along with the economy behind it.
