Month: May 2023

Chinese stocks sink to six-month lows on weaker economic readings in May

Posted on by Vrasidas Neofytou

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

The official manufacturing purchasing managers’ index (PMI) fell to a five-month low of 48.8, down from 49.2 in April and below the 50-point mark that separates expansion from contraction. The PMI also dashed forecasts for an increase to 49.4.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

The official manufacturing purchasing managers’ index (PMI) fell to a five-month low of 48.8, down from 49.2 in April and below the 50-point mark that separates expansion from contraction. The PMI also dashed forecasts for an increase to 49.4.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

The weaker-than-expected China PMI manufacturing activity in May has given sellers more ammo to pressure Chinese stocks lower today.

The official manufacturing purchasing managers’ index (PMI) fell to a five-month low of 48.8, down from 49.2 in April and below the 50-point mark that separates expansion from contraction. The PMI also dashed forecasts for an increase to 49.4.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

The weaker-than-expected China PMI manufacturing activity in May has given sellers more ammo to pressure Chinese stocks lower today.

The official manufacturing purchasing managers’ index (PMI) fell to a five-month low of 48.8, down from 49.2 in April and below the 50-point mark that separates expansion from contraction. The PMI also dashed forecasts for an increase to 49.4.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

Deteriorating economic activity in China:

The weaker-than-expected China PMI manufacturing activity in May has given sellers more ammo to pressure Chinese stocks lower today.

The official manufacturing purchasing managers’ index (PMI) fell to a five-month low of 48.8, down from 49.2 in April and below the 50-point mark that separates expansion from contraction. The PMI also dashed forecasts for an increase to 49.4.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

Deteriorating economic activity in China:

The weaker-than-expected China PMI manufacturing activity in May has given sellers more ammo to pressure Chinese stocks lower today.

The official manufacturing purchasing managers’ index (PMI) fell to a five-month low of 48.8, down from 49.2 in April and below the 50-point mark that separates expansion from contraction. The PMI also dashed forecasts for an increase to 49.4.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

All major indices have erased almost half of their post-pandemic gains (nearly 20%) of Q4 2022 triggered by the optimism over the reopening of the Chinese economy after 3 years of pandemic lockdowns and the prospects of a post-Covid economic and manufacturing recovery, which has quickly faded.

Deteriorating economic activity in China:

The weaker-than-expected China PMI manufacturing activity in May has given sellers more ammo to pressure Chinese stocks lower today.

The official manufacturing purchasing managers’ index (PMI) fell to a five-month low of 48.8, down from 49.2 in April and below the 50-point mark that separates expansion from contraction. The PMI also dashed forecasts for an increase to 49.4.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

All major indices have erased almost half of their post-pandemic gains (nearly 20%) of Q4 2022 triggered by the optimism over the reopening of the Chinese economy after 3 years of pandemic lockdowns and the prospects of a post-Covid economic and manufacturing recovery, which has quickly faded.

Deteriorating economic activity in China:

The weaker-than-expected China PMI manufacturing activity in May has given sellers more ammo to pressure Chinese stocks lower today.

The official manufacturing purchasing managers’ index (PMI) fell to a five-month low of 48.8, down from 49.2 in April and below the 50-point mark that separates expansion from contraction. The PMI also dashed forecasts for an increase to 49.4.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

The resumed tension between U.S. and China after Beijing declined a Washington request for a meeting between defense ministers has been also weighing on the investment sentiment for Chinese markets.

All major indices have erased almost half of their post-pandemic gains (nearly 20%) of Q4 2022 triggered by the optimism over the reopening of the Chinese economy after 3 years of pandemic lockdowns and the prospects of a post-Covid economic and manufacturing recovery, which has quickly faded.

Deteriorating economic activity in China:

The weaker-than-expected China PMI manufacturing activity in May has given sellers more ammo to pressure Chinese stocks lower today.

The official manufacturing purchasing managers’ index (PMI) fell to a five-month low of 48.8, down from 49.2 in April and below the 50-point mark that separates expansion from contraction. The PMI also dashed forecasts for an increase to 49.4.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

The resumed tension between U.S. and China after Beijing declined a Washington request for a meeting between defense ministers has been also weighing on the investment sentiment for Chinese markets.

All major indices have erased almost half of their post-pandemic gains (nearly 20%) of Q4 2022 triggered by the optimism over the reopening of the Chinese economy after 3 years of pandemic lockdowns and the prospects of a post-Covid economic and manufacturing recovery, which has quickly faded.

Deteriorating economic activity in China:

The weaker-than-expected China PMI manufacturing activity in May has given sellers more ammo to pressure Chinese stocks lower today.

The official manufacturing purchasing managers’ index (PMI) fell to a five-month low of 48.8, down from 49.2 in April and below the 50-point mark that separates expansion from contraction. The PMI also dashed forecasts for an increase to 49.4.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

Hang Seng index, Daily chart

The resumed tension between U.S. and China after Beijing declined a Washington request for a meeting between defense ministers has been also weighing on the investment sentiment for Chinese markets.

All major indices have erased almost half of their post-pandemic gains (nearly 20%) of Q4 2022 triggered by the optimism over the reopening of the Chinese economy after 3 years of pandemic lockdowns and the prospects of a post-Covid economic and manufacturing recovery, which has quickly faded.

Deteriorating economic activity in China:

The weaker-than-expected China PMI manufacturing activity in May has given sellers more ammo to pressure Chinese stocks lower today.

The official manufacturing purchasing managers’ index (PMI) fell to a five-month low of 48.8, down from 49.2 in April and below the 50-point mark that separates expansion from contraction. The PMI also dashed forecasts for an increase to 49.4.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

Hang Seng index, Daily chart

The resumed tension between U.S. and China after Beijing declined a Washington request for a meeting between defense ministers has been also weighing on the investment sentiment for Chinese markets.

All major indices have erased almost half of their post-pandemic gains (nearly 20%) of Q4 2022 triggered by the optimism over the reopening of the Chinese economy after 3 years of pandemic lockdowns and the prospects of a post-Covid economic and manufacturing recovery, which has quickly faded.

Deteriorating economic activity in China:

The weaker-than-expected China PMI manufacturing activity in May has given sellers more ammo to pressure Chinese stocks lower today.

The official manufacturing purchasing managers’ index (PMI) fell to a five-month low of 48.8, down from 49.2 in April and below the 50-point mark that separates expansion from contraction. The PMI also dashed forecasts for an increase to 49.4.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

Hang Seng index, Daily chart

The resumed tension between U.S. and China after Beijing declined a Washington request for a meeting between defense ministers has been also weighing on the investment sentiment for Chinese markets.

All major indices have erased almost half of their post-pandemic gains (nearly 20%) of Q4 2022 triggered by the optimism over the reopening of the Chinese economy after 3 years of pandemic lockdowns and the prospects of a post-Covid economic and manufacturing recovery, which has quickly faded.

Deteriorating economic activity in China:

The weaker-than-expected China PMI manufacturing activity in May has given sellers more ammo to pressure Chinese stocks lower today.

The official manufacturing purchasing managers’ index (PMI) fell to a five-month low of 48.8, down from 49.2 in April and below the 50-point mark that separates expansion from contraction. The PMI also dashed forecasts for an increase to 49.4.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

Mainland’s indices Shanghai Shenzhen CSI 300 and Shanghai Composite also fell 1% and 0.6%, respectively, to their lowest since the end of November 2022, closing between 3.6% and 6% lower for May.

Hang Seng index, Daily chart

The resumed tension between U.S. and China after Beijing declined a Washington request for a meeting between defense ministers has been also weighing on the investment sentiment for Chinese markets.

All major indices have erased almost half of their post-pandemic gains (nearly 20%) of Q4 2022 triggered by the optimism over the reopening of the Chinese economy after 3 years of pandemic lockdowns and the prospects of a post-Covid economic and manufacturing recovery, which has quickly faded.

Deteriorating economic activity in China:

The weaker-than-expected China PMI manufacturing activity in May has given sellers more ammo to pressure Chinese stocks lower today.

The official manufacturing purchasing managers’ index (PMI) fell to a five-month low of 48.8, down from 49.2 in April and below the 50-point mark that separates expansion from contraction. The PMI also dashed forecasts for an increase to 49.4.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

Mainland’s indices Shanghai Shenzhen CSI 300 and Shanghai Composite also fell 1% and 0.6%, respectively, to their lowest since the end of November 2022, closing between 3.6% and 6% lower for May.

Hang Seng index, Daily chart

The resumed tension between U.S. and China after Beijing declined a Washington request for a meeting between defense ministers has been also weighing on the investment sentiment for Chinese markets.

All major indices have erased almost half of their post-pandemic gains (nearly 20%) of Q4 2022 triggered by the optimism over the reopening of the Chinese economy after 3 years of pandemic lockdowns and the prospects of a post-Covid economic and manufacturing recovery, which has quickly faded.

Deteriorating economic activity in China:

The weaker-than-expected China PMI manufacturing activity in May has given sellers more ammo to pressure Chinese stocks lower today.

The official manufacturing purchasing managers’ index (PMI) fell to a five-month low of 48.8, down from 49.2 in April and below the 50-point mark that separates expansion from contraction. The PMI also dashed forecasts for an increase to 49.4.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

Hong Kong’s Hang Seng index settled 2.40% lower to its weakest level in six months of 18,044 points, down nearly 9% in May led by technology stocks. The index briefly dipped into bear market territory on an intraday basis, as it retreated by 20.5% below its 52-week closing high of 22,688 points reached on January 27, 2023. A technical bear market is defined as when prices fall 20% below recent highs.

Mainland’s indices Shanghai Shenzhen CSI 300 and Shanghai Composite also fell 1% and 0.6%, respectively, to their lowest since the end of November 2022, closing between 3.6% and 6% lower for May.

Hang Seng index, Daily chart

The resumed tension between U.S. and China after Beijing declined a Washington request for a meeting between defense ministers has been also weighing on the investment sentiment for Chinese markets.

All major indices have erased almost half of their post-pandemic gains (nearly 20%) of Q4 2022 triggered by the optimism over the reopening of the Chinese economy after 3 years of pandemic lockdowns and the prospects of a post-Covid economic and manufacturing recovery, which has quickly faded.

Deteriorating economic activity in China:

The weaker-than-expected China PMI manufacturing activity in May has given sellers more ammo to pressure Chinese stocks lower today.

The official manufacturing purchasing managers’ index (PMI) fell to a five-month low of 48.8, down from 49.2 in April and below the 50-point mark that separates expansion from contraction. The PMI also dashed forecasts for an increase to 49.4.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

Hong Kong’s Hang Seng index settled 2.40% lower to its weakest level in six months of 18,044 points, down nearly 9% in May led by technology stocks. The index briefly dipped into bear market territory on an intraday basis, as it retreated by 20.5% below its 52-week closing high of 22,688 points reached on January 27, 2023. A technical bear market is defined as when prices fall 20% below recent highs.

Mainland’s indices Shanghai Shenzhen CSI 300 and Shanghai Composite also fell 1% and 0.6%, respectively, to their lowest since the end of November 2022, closing between 3.6% and 6% lower for May.

Hang Seng index, Daily chart

The resumed tension between U.S. and China after Beijing declined a Washington request for a meeting between defense ministers has been also weighing on the investment sentiment for Chinese markets.

All major indices have erased almost half of their post-pandemic gains (nearly 20%) of Q4 2022 triggered by the optimism over the reopening of the Chinese economy after 3 years of pandemic lockdowns and the prospects of a post-Covid economic and manufacturing recovery, which has quickly faded.

Deteriorating economic activity in China:

The weaker-than-expected China PMI manufacturing activity in May has given sellers more ammo to pressure Chinese stocks lower today.

The official manufacturing purchasing managers’ index (PMI) fell to a five-month low of 48.8, down from 49.2 in April and below the 50-point mark that separates expansion from contraction. The PMI also dashed forecasts for an increase to 49.4.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

Chinese stocks sank over 2% to their lowest level in six months on Wednesday following disappointing China’s economic, manufacturing, and services activity in May for a second month, the fading post-pandemic recovery story, and the escalating tension between the U.S. and China.

Hong Kong’s Hang Seng index settled 2.40% lower to its weakest level in six months of 18,044 points, down nearly 9% in May led by technology stocks. The index briefly dipped into bear market territory on an intraday basis, as it retreated by 20.5% below its 52-week closing high of 22,688 points reached on January 27, 2023. A technical bear market is defined as when prices fall 20% below recent highs.

Mainland’s indices Shanghai Shenzhen CSI 300 and Shanghai Composite also fell 1% and 0.6%, respectively, to their lowest since the end of November 2022, closing between 3.6% and 6% lower for May.

Hang Seng index, Daily chart

The resumed tension between U.S. and China after Beijing declined a Washington request for a meeting between defense ministers has been also weighing on the investment sentiment for Chinese markets.

All major indices have erased almost half of their post-pandemic gains (nearly 20%) of Q4 2022 triggered by the optimism over the reopening of the Chinese economy after 3 years of pandemic lockdowns and the prospects of a post-Covid economic and manufacturing recovery, which has quickly faded.

Deteriorating economic activity in China:

The weaker-than-expected China PMI manufacturing activity in May has given sellers more ammo to pressure Chinese stocks lower today.

The official manufacturing purchasing managers’ index (PMI) fell to a five-month low of 48.8, down from 49.2 in April and below the 50-point mark that separates expansion from contraction. The PMI also dashed forecasts for an increase to 49.4.

Adding to that, the service sector activity expanded at the slowest pace in four months in May, with the official non-manufacturing PMI falling to 54.5 from 56.4 in April, and well below the forecasted expansion of 55.1.

According to the official data, chemical, ferrous metal smelting, and rolling processing industries faced significant declines in production and demand, while in the services sector, rail and air transport, accommodation and catering sectors remained in the expansion, on the back of strong May Labor Day travel, while real estate activity fell.

China’s weakness in factory and services readings came to confirm the general contracting economic activity across Asia, and that the post-pandemic recovery is losing steam, with Japan reporting a surprise decline in output and retail sales, and South Korea posting lower production.

Gold hits a two-month low of $1,930/oz on debt agreement and a soaring dollar

Posted on by Vrasidas Neofytou

In this context, the price of the yellow metal has lost over 6% since hitting an all-time high of $2,085/oz on May 4, falling for four-straight trading weeks in the row, while silver -the white gold- has also fallen below the key $23/oz support level this morning, following the selling pressure on gold.

In this context, the price of the yellow metal has lost over 6% since hitting an all-time high of $2,085/oz on May 4, falling for four-straight trading weeks in the row, while silver -the white gold- has also fallen below the key $23/oz support level this morning, following the selling pressure on gold.

The DXY-U.S. dollar index which tracks the value of the greenback against six major peers, has recovered up to the 104.50 level, making the dollar-denominated gold and silver contracts less attractive for buyers with foreign currency.

In this context, the price of the yellow metal has lost over 6% since hitting an all-time high of $2,085/oz on May 4, falling for four-straight trading weeks in the row, while silver -the white gold- has also fallen below the key $23/oz support level this morning, following the selling pressure on gold.

The DXY-U.S. dollar index which tracks the value of the greenback against six major peers, has recovered up to the 104.50 level, making the dollar-denominated gold and silver contracts less attractive for buyers with foreign currency.

In this context, the price of the yellow metal has lost over 6% since hitting an all-time high of $2,085/oz on May 4, falling for four-straight trading weeks in the row, while silver -the white gold- has also fallen below the key $23/oz support level this morning, following the selling pressure on gold.

Fed officials have increased their hawkish outlook on interest rates during May as they worry even more about resilient inflation, sending higher yields on 2-year and 10-year U.S. bonds to 4.60% and 3.70% respectively, damaging the appeal for zero-yield gold and silver.

The DXY-U.S. dollar index which tracks the value of the greenback against six major peers, has recovered up to the 104.50 level, making the dollar-denominated gold and silver contracts less attractive for buyers with foreign currency.

In this context, the price of the yellow metal has lost over 6% since hitting an all-time high of $2,085/oz on May 4, falling for four-straight trading weeks in the row, while silver -the white gold- has also fallen below the key $23/oz support level this morning, following the selling pressure on gold.

Fed officials have increased their hawkish outlook on interest rates during May as they worry even more about resilient inflation, sending higher yields on 2-year and 10-year U.S. bonds to 4.60% and 3.70% respectively, damaging the appeal for zero-yield gold and silver.

The DXY-U.S. dollar index which tracks the value of the greenback against six major peers, has recovered up to the 104.50 level, making the dollar-denominated gold and silver contracts less attractive for buyers with foreign currency.

In this context, the price of the yellow metal has lost over 6% since hitting an all-time high of $2,085/oz on May 4, falling for four-straight trading weeks in the row, while silver -the white gold- has also fallen below the key $23/oz support level this morning, following the selling pressure on gold.

Greenback has been boosted following the hawkish stance by the Federal Reserve as the U.S. CPI inflation was still hot in April, while the labor market and economy remain too strong despite rising rates, indicating that the central bank will need to raise interest rates again in June and July versus expectations for a pause.

Fed officials have increased their hawkish outlook on interest rates during May as they worry even more about resilient inflation, sending higher yields on 2-year and 10-year U.S. bonds to 4.60% and 3.70% respectively, damaging the appeal for zero-yield gold and silver.

The DXY-U.S. dollar index which tracks the value of the greenback against six major peers, has recovered up to the 104.50 level, making the dollar-denominated gold and silver contracts less attractive for buyers with foreign currency.

In this context, the price of the yellow metal has lost over 6% since hitting an all-time high of $2,085/oz on May 4, falling for four-straight trading weeks in the row, while silver -the white gold- has also fallen below the key $23/oz support level this morning, following the selling pressure on gold.

Greenback has been boosted following the hawkish stance by the Federal Reserve as the U.S. CPI inflation was still hot in April, while the labor market and economy remain too strong despite rising rates, indicating that the central bank will need to raise interest rates again in June and July versus expectations for a pause.

Fed officials have increased their hawkish outlook on interest rates during May as they worry even more about resilient inflation, sending higher yields on 2-year and 10-year U.S. bonds to 4.60% and 3.70% respectively, damaging the appeal for zero-yield gold and silver.

The DXY-U.S. dollar index which tracks the value of the greenback against six major peers, has recovered up to the 104.50 level, making the dollar-denominated gold and silver contracts less attractive for buyers with foreign currency.

In this context, the price of the yellow metal has lost over 6% since hitting an all-time high of $2,085/oz on May 4, falling for four-straight trading weeks in the row, while silver -the white gold- has also fallen below the key $23/oz support level this morning, following the selling pressure on gold.

The bearish sentiment for bullion has also been boosted in the last few weeks following the rebound of the U.S. dollar from its yearly lows driven by the U.S. regional banking crisis in early March.

Greenback has been boosted following the hawkish stance by the Federal Reserve as the U.S. CPI inflation was still hot in April, while the labor market and economy remain too strong despite rising rates, indicating that the central bank will need to raise interest rates again in June and July versus expectations for a pause.

Fed officials have increased their hawkish outlook on interest rates during May as they worry even more about resilient inflation, sending higher yields on 2-year and 10-year U.S. bonds to 4.60% and 3.70% respectively, damaging the appeal for zero-yield gold and silver.

The DXY-U.S. dollar index which tracks the value of the greenback against six major peers, has recovered up to the 104.50 level, making the dollar-denominated gold and silver contracts less attractive for buyers with foreign currency.

In this context, the price of the yellow metal has lost over 6% since hitting an all-time high of $2,085/oz on May 4, falling for four-straight trading weeks in the row, while silver -the white gold- has also fallen below the key $23/oz support level this morning, following the selling pressure on gold.

The bearish sentiment for bullion has also been boosted in the last few weeks following the rebound of the U.S. dollar from its yearly lows driven by the U.S. regional banking crisis in early March.

Greenback has been boosted following the hawkish stance by the Federal Reserve as the U.S. CPI inflation was still hot in April, while the labor market and economy remain too strong despite rising rates, indicating that the central bank will need to raise interest rates again in June and July versus expectations for a pause.

Fed officials have increased their hawkish outlook on interest rates during May as they worry even more about resilient inflation, sending higher yields on 2-year and 10-year U.S. bonds to 4.60% and 3.70% respectively, damaging the appeal for zero-yield gold and silver.

The DXY-U.S. dollar index which tracks the value of the greenback against six major peers, has recovered up to the 104.50 level, making the dollar-denominated gold and silver contracts less attractive for buyers with foreign currency.

In this context, the price of the yellow metal has lost over 6% since hitting an all-time high of $2,085/oz on May 4, falling for four-straight trading weeks in the row, while silver -the white gold- has also fallen below the key $23/oz support level this morning, following the selling pressure on gold.

The optimism over a U.S. debt ceiling deal has eased fears of a debt default in the world’s largest economy, reducing the demand for protection by using gold and silver futures as a default-hedge trade in case debt ceiling talks failed.

The bearish sentiment for bullion has also been boosted in the last few weeks following the rebound of the U.S. dollar from its yearly lows driven by the U.S. regional banking crisis in early March.

Greenback has been boosted following the hawkish stance by the Federal Reserve as the U.S. CPI inflation was still hot in April, while the labor market and economy remain too strong despite rising rates, indicating that the central bank will need to raise interest rates again in June and July versus expectations for a pause.

Fed officials have increased their hawkish outlook on interest rates during May as they worry even more about resilient inflation, sending higher yields on 2-year and 10-year U.S. bonds to 4.60% and 3.70% respectively, damaging the appeal for zero-yield gold and silver.

The DXY-U.S. dollar index which tracks the value of the greenback against six major peers, has recovered up to the 104.50 level, making the dollar-denominated gold and silver contracts less attractive for buyers with foreign currency.

In this context, the price of the yellow metal has lost over 6% since hitting an all-time high of $2,085/oz on May 4, falling for four-straight trading weeks in the row, while silver -the white gold- has also fallen below the key $23/oz support level this morning, following the selling pressure on gold.

The optimism over a U.S. debt ceiling deal has eased fears of a debt default in the world’s largest economy, reducing the demand for protection by using gold and silver futures as a default-hedge trade in case debt ceiling talks failed.

The bearish sentiment for bullion has also been boosted in the last few weeks following the rebound of the U.S. dollar from its yearly lows driven by the U.S. regional banking crisis in early March.

Greenback has been boosted following the hawkish stance by the Federal Reserve as the U.S. CPI inflation was still hot in April, while the labor market and economy remain too strong despite rising rates, indicating that the central bank will need to raise interest rates again in June and July versus expectations for a pause.

Fed officials have increased their hawkish outlook on interest rates during May as they worry even more about resilient inflation, sending higher yields on 2-year and 10-year U.S. bonds to 4.60% and 3.70% respectively, damaging the appeal for zero-yield gold and silver.

The DXY-U.S. dollar index which tracks the value of the greenback against six major peers, has recovered up to the 104.50 level, making the dollar-denominated gold and silver contracts less attractive for buyers with foreign currency.

In this context, the price of the yellow metal has lost over 6% since hitting an all-time high of $2,085/oz on May 4, falling for four-straight trading weeks in the row, while silver -the white gold- has also fallen below the key $23/oz support level this morning, following the selling pressure on gold.

Gold, Daily chart

The optimism over a U.S. debt ceiling deal has eased fears of a debt default in the world’s largest economy, reducing the demand for protection by using gold and silver futures as a default-hedge trade in case debt ceiling talks failed.

The bearish sentiment for bullion has also been boosted in the last few weeks following the rebound of the U.S. dollar from its yearly lows driven by the U.S. regional banking crisis in early March.

Greenback has been boosted following the hawkish stance by the Federal Reserve as the U.S. CPI inflation was still hot in April, while the labor market and economy remain too strong despite rising rates, indicating that the central bank will need to raise interest rates again in June and July versus expectations for a pause.

Fed officials have increased their hawkish outlook on interest rates during May as they worry even more about resilient inflation, sending higher yields on 2-year and 10-year U.S. bonds to 4.60% and 3.70% respectively, damaging the appeal for zero-yield gold and silver.

The DXY-U.S. dollar index which tracks the value of the greenback against six major peers, has recovered up to the 104.50 level, making the dollar-denominated gold and silver contracts less attractive for buyers with foreign currency.

In this context, the price of the yellow metal has lost over 6% since hitting an all-time high of $2,085/oz on May 4, falling for four-straight trading weeks in the row, while silver -the white gold- has also fallen below the key $23/oz support level this morning, following the selling pressure on gold.

Gold, Daily chart

The optimism over a U.S. debt ceiling deal has eased fears of a debt default in the world’s largest economy, reducing the demand for protection by using gold and silver futures as a default-hedge trade in case debt ceiling talks failed.

The bearish sentiment for bullion has also been boosted in the last few weeks following the rebound of the U.S. dollar from its yearly lows driven by the U.S. regional banking crisis in early March.

Greenback has been boosted following the hawkish stance by the Federal Reserve as the U.S. CPI inflation was still hot in April, while the labor market and economy remain too strong despite rising rates, indicating that the central bank will need to raise interest rates again in June and July versus expectations for a pause.

Fed officials have increased their hawkish outlook on interest rates during May as they worry even more about resilient inflation, sending higher yields on 2-year and 10-year U.S. bonds to 4.60% and 3.70% respectively, damaging the appeal for zero-yield gold and silver.

The DXY-U.S. dollar index which tracks the value of the greenback against six major peers, has recovered up to the 104.50 level, making the dollar-denominated gold and silver contracts less attractive for buyers with foreign currency.

In this context, the price of the yellow metal has lost over 6% since hitting an all-time high of $2,085/oz on May 4, falling for four-straight trading weeks in the row, while silver -the white gold- has also fallen below the key $23/oz support level this morning, following the selling pressure on gold.

The price of gold dropped as much as 2% to nearly $1,930/oz on Tuesday morning, posting its lowest level since mid-March as investors move away from havens to pivot into risk-driven assets following the news of a tentative deal to raise the U.S. debt ceiling between the Joe Biden administration and Republican lawmakers, coupled with the rebounding greenback.

Gold, Daily chart

The optimism over a U.S. debt ceiling deal has eased fears of a debt default in the world’s largest economy, reducing the demand for protection by using gold and silver futures as a default-hedge trade in case debt ceiling talks failed.

The bearish sentiment for bullion has also been boosted in the last few weeks following the rebound of the U.S. dollar from its yearly lows driven by the U.S. regional banking crisis in early March.

Greenback has been boosted following the hawkish stance by the Federal Reserve as the U.S. CPI inflation was still hot in April, while the labor market and economy remain too strong despite rising rates, indicating that the central bank will need to raise interest rates again in June and July versus expectations for a pause.

Fed officials have increased their hawkish outlook on interest rates during May as they worry even more about resilient inflation, sending higher yields on 2-year and 10-year U.S. bonds to 4.60% and 3.70% respectively, damaging the appeal for zero-yield gold and silver.

The DXY-U.S. dollar index which tracks the value of the greenback against six major peers, has recovered up to the 104.50 level, making the dollar-denominated gold and silver contracts less attractive for buyers with foreign currency.

In this context, the price of the yellow metal has lost over 6% since hitting an all-time high of $2,085/oz on May 4, falling for four-straight trading weeks in the row, while silver -the white gold- has also fallen below the key $23/oz support level this morning, following the selling pressure on gold.

Turkish Lira falls over 20 a dollar as Erdogan secures victory

Posted on by Vrasidas Neofytou

Major global analyst Morgan Stanley is predicting Lira to weaken as low as 28 per dollar by the end of 2023 if Erdogan doesn’t change his monetary policy of keeping interest rates low, at a time central bank’s fx and gold reserves have been weakening to support the falling Lira.

Major global analyst Morgan Stanley is predicting Lira to weaken as low as 28 per dollar by the end of 2023 if Erdogan doesn’t change his monetary policy of keeping interest rates low, at a time central bank’s fx and gold reserves have been weakening to support the falling Lira.

Turkish central bankers backed by Erdogan’s will, have applied unusual monetary policies to curb inflation that topped nearly 85% last year, cutting interest rates to 8.5% from 19% two years ago despite elevating inflation, to support local businesses and households.

Major global analyst Morgan Stanley is predicting Lira to weaken as low as 28 per dollar by the end of 2023 if Erdogan doesn’t change his monetary policy of keeping interest rates low, at a time central bank’s fx and gold reserves have been weakening to support the falling Lira.

Turkish central bankers backed by Erdogan’s will, have applied unusual monetary policies to curb inflation that topped nearly 85% last year, cutting interest rates to 8.5% from 19% two years ago despite elevating inflation, to support local businesses and households.

Major global analyst Morgan Stanley is predicting Lira to weaken as low as 28 per dollar by the end of 2023 if Erdogan doesn’t change his monetary policy of keeping interest rates low, at a time central bank’s fx and gold reserves have been weakening to support the falling Lira.

The Lira, which started 2023 trading at around 18.60 per dollar and 19.75 per euro, has been trading in an ongoing downward trend momentum against both major peers, losing nearly 8% this year so far, and losing more than 90% of its value over the past decade with the economy in the clasp of boom-and-bust cycles, record-high inflation to as high as 85% in 2022, and a Lira disaster.

Turkish central bankers backed by Erdogan’s will, have applied unusual monetary policies to curb inflation that topped nearly 85% last year, cutting interest rates to 8.5% from 19% two years ago despite elevating inflation, to support local businesses and households.

Major global analyst Morgan Stanley is predicting Lira to weaken as low as 28 per dollar by the end of 2023 if Erdogan doesn’t change his monetary policy of keeping interest rates low, at a time central bank’s fx and gold reserves have been weakening to support the falling Lira.

The Lira, which started 2023 trading at around 18.60 per dollar and 19.75 per euro, has been trading in an ongoing downward trend momentum against both major peers, losing nearly 8% this year so far, and losing more than 90% of its value over the past decade with the economy in the clasp of boom-and-bust cycles, record-high inflation to as high as 85% in 2022, and a Lira disaster.

Turkish central bankers backed by Erdogan’s will, have applied unusual monetary policies to curb inflation that topped nearly 85% last year, cutting interest rates to 8.5% from 19% two years ago despite elevating inflation, to support local businesses and households.

Major global analyst Morgan Stanley is predicting Lira to weaken as low as 28 per dollar by the end of 2023 if Erdogan doesn’t change his monetary policy of keeping interest rates low, at a time central bank’s fx and gold reserves have been weakening to support the falling Lira.

USD/TRY, Daily chart

The Lira, which started 2023 trading at around 18.60 per dollar and 19.75 per euro, has been trading in an ongoing downward trend momentum against both major peers, losing nearly 8% this year so far, and losing more than 90% of its value over the past decade with the economy in the clasp of boom-and-bust cycles, record-high inflation to as high as 85% in 2022, and a Lira disaster.

Turkish central bankers backed by Erdogan’s will, have applied unusual monetary policies to curb inflation that topped nearly 85% last year, cutting interest rates to 8.5% from 19% two years ago despite elevating inflation, to support local businesses and households.

Major global analyst Morgan Stanley is predicting Lira to weaken as low as 28 per dollar by the end of 2023 if Erdogan doesn’t change his monetary policy of keeping interest rates low, at a time central bank’s fx and gold reserves have been weakening to support the falling Lira.

USD/TRY, Daily chart

The Lira, which started 2023 trading at around 18.60 per dollar and 19.75 per euro, has been trading in an ongoing downward trend momentum against both major peers, losing nearly 8% this year so far, and losing more than 90% of its value over the past decade with the economy in the clasp of boom-and-bust cycles, record-high inflation to as high as 85% in 2022, and a Lira disaster.

Turkish central bankers backed by Erdogan’s will, have applied unusual monetary policies to curb inflation that topped nearly 85% last year, cutting interest rates to 8.5% from 19% two years ago despite elevating inflation, to support local businesses and households.

Major global analyst Morgan Stanley is predicting Lira to weaken as low as 28 per dollar by the end of 2023 if Erdogan doesn’t change his monetary policy of keeping interest rates low, at a time central bank’s fx and gold reserves have been weakening to support the falling Lira.

USD/TRY, Daily chart

The Lira, which started 2023 trading at around 18.60 per dollar and 19.75 per euro, has been trading in an ongoing downward trend momentum against both major peers, losing nearly 8% this year so far, and losing more than 90% of its value over the past decade with the economy in the clasp of boom-and-bust cycles, record-high inflation to as high as 85% in 2022, and a Lira disaster.

Turkish central bankers backed by Erdogan’s will, have applied unusual monetary policies to curb inflation that topped nearly 85% last year, cutting interest rates to 8.5% from 19% two years ago despite elevating inflation, to support local businesses and households.

Major global analyst Morgan Stanley is predicting Lira to weaken as low as 28 per dollar by the end of 2023 if Erdogan doesn’t change his monetary policy of keeping interest rates low, at a time central bank’s fx and gold reserves have been weakening to support the falling Lira.

In this context, the Lira declined as much as 1% to 20,12 per dollar, near a record low hit on Friday, and fell to 21.50 per euro, also near a record low of 21,60 hit last week, as investors believe that the current unorthodox monetary and economic policies, over 40% inflation, the limited FX reserves, and the massively negative real interest rates are not sustainable.

USD/TRY, Daily chart

The Lira, which started 2023 trading at around 18.60 per dollar and 19.75 per euro, has been trading in an ongoing downward trend momentum against both major peers, losing nearly 8% this year so far, and losing more than 90% of its value over the past decade with the economy in the clasp of boom-and-bust cycles, record-high inflation to as high as 85% in 2022, and a Lira disaster.

Turkish central bankers backed by Erdogan’s will, have applied unusual monetary policies to curb inflation that topped nearly 85% last year, cutting interest rates to 8.5% from 19% two years ago despite elevating inflation, to support local businesses and households.

Major global analyst Morgan Stanley is predicting Lira to weaken as low as 28 per dollar by the end of 2023 if Erdogan doesn’t change his monetary policy of keeping interest rates low, at a time central bank’s fx and gold reserves have been weakening to support the falling Lira.

In this context, the Lira declined as much as 1% to 20,12 per dollar, near a record low hit on Friday, and fell to 21.50 per euro, also near a record low of 21,60 hit last week, as investors believe that the current unorthodox monetary and economic policies, over 40% inflation, the limited FX reserves, and the massively negative real interest rates are not sustainable.

USD/TRY, Daily chart

The Lira, which started 2023 trading at around 18.60 per dollar and 19.75 per euro, has been trading in an ongoing downward trend momentum against both major peers, losing nearly 8% this year so far, and losing more than 90% of its value over the past decade with the economy in the clasp of boom-and-bust cycles, record-high inflation to as high as 85% in 2022, and a Lira disaster.

Turkish central bankers backed by Erdogan’s will, have applied unusual monetary policies to curb inflation that topped nearly 85% last year, cutting interest rates to 8.5% from 19% two years ago despite elevating inflation, to support local businesses and households.

Major global analyst Morgan Stanley is predicting Lira to weaken as low as 28 per dollar by the end of 2023 if Erdogan doesn’t change his monetary policy of keeping interest rates low, at a time central bank’s fx and gold reserves have been weakening to support the falling Lira.

Recep Tayyip Erdogan won Sunday’s elections by getting 52% of votes against 48% of his major rival Kemal Kilicdaroglu, extending his time for another 5-year term, spreading his increasingly authoritarian rule into a third decade, and becoming Turkey’s longest-serving leader in the modern history of the country.

In this context, the Lira declined as much as 1% to 20,12 per dollar, near a record low hit on Friday, and fell to 21.50 per euro, also near a record low of 21,60 hit last week, as investors believe that the current unorthodox monetary and economic policies, over 40% inflation, the limited FX reserves, and the massively negative real interest rates are not sustainable.

USD/TRY, Daily chart

The Lira, which started 2023 trading at around 18.60 per dollar and 19.75 per euro, has been trading in an ongoing downward trend momentum against both major peers, losing nearly 8% this year so far, and losing more than 90% of its value over the past decade with the economy in the clasp of boom-and-bust cycles, record-high inflation to as high as 85% in 2022, and a Lira disaster.

Turkish central bankers backed by Erdogan’s will, have applied unusual monetary policies to curb inflation that topped nearly 85% last year, cutting interest rates to 8.5% from 19% two years ago despite elevating inflation, to support local businesses and households.

Major global analyst Morgan Stanley is predicting Lira to weaken as low as 28 per dollar by the end of 2023 if Erdogan doesn’t change his monetary policy of keeping interest rates low, at a time central bank’s fx and gold reserves have been weakening to support the falling Lira.

Recep Tayyip Erdogan won Sunday’s elections by getting 52% of votes against 48% of his major rival Kemal Kilicdaroglu, extending his time for another 5-year term, spreading his increasingly authoritarian rule into a third decade, and becoming Turkey’s longest-serving leader in the modern history of the country.

In this context, the Lira declined as much as 1% to 20,12 per dollar, near a record low hit on Friday, and fell to 21.50 per euro, also near a record low of 21,60 hit last week, as investors believe that the current unorthodox monetary and economic policies, over 40% inflation, the limited FX reserves, and the massively negative real interest rates are not sustainable.

USD/TRY, Daily chart

The Lira, which started 2023 trading at around 18.60 per dollar and 19.75 per euro, has been trading in an ongoing downward trend momentum against both major peers, losing nearly 8% this year so far, and losing more than 90% of its value over the past decade with the economy in the clasp of boom-and-bust cycles, record-high inflation to as high as 85% in 2022, and a Lira disaster.

Turkish central bankers backed by Erdogan’s will, have applied unusual monetary policies to curb inflation that topped nearly 85% last year, cutting interest rates to 8.5% from 19% two years ago despite elevating inflation, to support local businesses and households.

Major global analyst Morgan Stanley is predicting Lira to weaken as low as 28 per dollar by the end of 2023 if Erdogan doesn’t change his monetary policy of keeping interest rates low, at a time central bank’s fx and gold reserves have been weakening to support the falling Lira.

Turkish Lira hit a fresh record low of $20,10 a dollar on Monday morning, extending yearly losses as foreign investors worry that the outlook of the local economy will be negative after the re-election of President Erdogan on the 2nd round of the presidential election on Sunday, May 28.

Recep Tayyip Erdogan won Sunday’s elections by getting 52% of votes against 48% of his major rival Kemal Kilicdaroglu, extending his time for another 5-year term, spreading his increasingly authoritarian rule into a third decade, and becoming Turkey’s longest-serving leader in the modern history of the country.

In this context, the Lira declined as much as 1% to 20,12 per dollar, near a record low hit on Friday, and fell to 21.50 per euro, also near a record low of 21,60 hit last week, as investors believe that the current unorthodox monetary and economic policies, over 40% inflation, the limited FX reserves, and the massively negative real interest rates are not sustainable.

USD/TRY, Daily chart

The Lira, which started 2023 trading at around 18.60 per dollar and 19.75 per euro, has been trading in an ongoing downward trend momentum against both major peers, losing nearly 8% this year so far, and losing more than 90% of its value over the past decade with the economy in the clasp of boom-and-bust cycles, record-high inflation to as high as 85% in 2022, and a Lira disaster.

Turkish central bankers backed by Erdogan’s will, have applied unusual monetary policies to curb inflation that topped nearly 85% last year, cutting interest rates to 8.5% from 19% two years ago despite elevating inflation, to support local businesses and households.

Major global analyst Morgan Stanley is predicting Lira to weaken as low as 28 per dollar by the end of 2023 if Erdogan doesn’t change his monetary policy of keeping interest rates low, at a time central bank’s fx and gold reserves have been weakening to support the falling Lira.

Nvidia’s 24% gain fuels a strong rally in AI-related tech companies

Posted on by Vrasidas Neofytou

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

Generative Artificial Intelligence (AI) is the technology that runs by ChatGPT that learns from analyzing vast datasets to generate text, images, and computer code, while businesses are trying to use generative AI to speed up video editing, recruitment, and even legal work.

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

Generative Artificial Intelligence (AI) is the technology that runs by ChatGPT that learns from analyzing vast datasets to generate text, images, and computer code, while businesses are trying to use generative AI to speed up video editing, recruitment, and even legal work.

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

Tech investors have turned to Artificial Intelligence (AI) space since last November when Microsoft-backed OpenAI released its ChatGPT bot.

Generative Artificial Intelligence (AI) is the technology that runs by ChatGPT that learns from analyzing vast datasets to generate text, images, and computer code, while businesses are trying to use generative AI to speed up video editing, recruitment, and even legal work.

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

Tech investors have turned to Artificial Intelligence (AI) space since last November when Microsoft-backed OpenAI released its ChatGPT bot.

Generative Artificial Intelligence (AI) is the technology that runs by ChatGPT that learns from analyzing vast datasets to generate text, images, and computer code, while businesses are trying to use generative AI to speed up video editing, recruitment, and even legal work.

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

Artificial Intelligence (AI) frenzy:

Tech investors have turned to Artificial Intelligence (AI) space since last November when Microsoft-backed OpenAI released its ChatGPT bot.

Generative Artificial Intelligence (AI) is the technology that runs by ChatGPT that learns from analyzing vast datasets to generate text, images, and computer code, while businesses are trying to use generative AI to speed up video editing, recruitment, and even legal work.

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

 

Artificial Intelligence (AI) frenzy:

Tech investors have turned to Artificial Intelligence (AI) space since last November when Microsoft-backed OpenAI released its ChatGPT bot.

Generative Artificial Intelligence (AI) is the technology that runs by ChatGPT that learns from analyzing vast datasets to generate text, images, and computer code, while businesses are trying to use generative AI to speed up video editing, recruitment, and even legal work.

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

Adding to that, the mega-cap AI players Microsoft and Alphabet rose 3.85% to $325 and 2.13% to $123 respectively, Advanced Micro Devices-AMD jumped about 11% to $120, Micron Technology-MU added 4.6% to $69, and Broadcom-AVGO climbed more than 7% to $728.

 

Artificial Intelligence (AI) frenzy:

Tech investors have turned to Artificial Intelligence (AI) space since last November when Microsoft-backed OpenAI released its ChatGPT bot.

Generative Artificial Intelligence (AI) is the technology that runs by ChatGPT that learns from analyzing vast datasets to generate text, images, and computer code, while businesses are trying to use generative AI to speed up video editing, recruitment, and even legal work.

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

Adding to that, the mega-cap AI players Microsoft and Alphabet rose 3.85% to $325 and 2.13% to $123 respectively, Advanced Micro Devices-AMD jumped about 11% to $120, Micron Technology-MU added 4.6% to $69, and Broadcom-AVGO climbed more than 7% to $728.

 

Artificial Intelligence (AI) frenzy:

Tech investors have turned to Artificial Intelligence (AI) space since last November when Microsoft-backed OpenAI released its ChatGPT bot.

Generative Artificial Intelligence (AI) is the technology that runs by ChatGPT that learns from analyzing vast datasets to generate text, images, and computer code, while businesses are trying to use generative AI to speed up video editing, recruitment, and even legal work.

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

The Philadelphia SE Semiconductor index-SOX soared 6.8% to its highest level in more than a year in its biggest daily percentage rise since November given the bullish momentum on the sector as investors increased interest in the artificial intelligence race.

Adding to that, the mega-cap AI players Microsoft and Alphabet rose 3.85% to $325 and 2.13% to $123 respectively, Advanced Micro Devices-AMD jumped about 11% to $120, Micron Technology-MU added 4.6% to $69, and Broadcom-AVGO climbed more than 7% to $728.

 

Artificial Intelligence (AI) frenzy:

Tech investors have turned to Artificial Intelligence (AI) space since last November when Microsoft-backed OpenAI released its ChatGPT bot.

Generative Artificial Intelligence (AI) is the technology that runs by ChatGPT that learns from analyzing vast datasets to generate text, images, and computer code, while businesses are trying to use generative AI to speed up video editing, recruitment, and even legal work.

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

The Philadelphia SE Semiconductor index-SOX soared 6.8% to its highest level in more than a year in its biggest daily percentage rise since November given the bullish momentum on the sector as investors increased interest in the artificial intelligence race.

Adding to that, the mega-cap AI players Microsoft and Alphabet rose 3.85% to $325 and 2.13% to $123 respectively, Advanced Micro Devices-AMD jumped about 11% to $120, Micron Technology-MU added 4.6% to $69, and Broadcom-AVGO climbed more than 7% to $728.

 

Artificial Intelligence (AI) frenzy:

Tech investors have turned to Artificial Intelligence (AI) space since last November when Microsoft-backed OpenAI released its ChatGPT bot.

Generative Artificial Intelligence (AI) is the technology that runs by ChatGPT that learns from analyzing vast datasets to generate text, images, and computer code, while businesses are trying to use generative AI to speed up video editing, recruitment, and even legal work.

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

In this AI frenzy, tech-heavy Nasdaq Composite ended sharply higher by 1.7% to 12,698 points on Thursday as the positive earnings from NVIDIA boosted tech stocks that are exposed to the red-hot Artificial Intelligence (AI) space and other tech stocks that are exposed to them.

The Philadelphia SE Semiconductor index-SOX soared 6.8% to its highest level in more than a year in its biggest daily percentage rise since November given the bullish momentum on the sector as investors increased interest in the artificial intelligence race.

Adding to that, the mega-cap AI players Microsoft and Alphabet rose 3.85% to $325 and 2.13% to $123 respectively, Advanced Micro Devices-AMD jumped about 11% to $120, Micron Technology-MU added 4.6% to $69, and Broadcom-AVGO climbed more than 7% to $728.

 

Artificial Intelligence (AI) frenzy:

Tech investors have turned to Artificial Intelligence (AI) space since last November when Microsoft-backed OpenAI released its ChatGPT bot.

Generative Artificial Intelligence (AI) is the technology that runs by ChatGPT that learns from analyzing vast datasets to generate text, images, and computer code, while businesses are trying to use generative AI to speed up video editing, recruitment, and even legal work.

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

In this AI frenzy, tech-heavy Nasdaq Composite ended sharply higher by 1.7% to 12,698 points on Thursday as the positive earnings from NVIDIA boosted tech stocks that are exposed to the red-hot Artificial Intelligence (AI) space and other tech stocks that are exposed to them.

The Philadelphia SE Semiconductor index-SOX soared 6.8% to its highest level in more than a year in its biggest daily percentage rise since November given the bullish momentum on the sector as investors increased interest in the artificial intelligence race.

Adding to that, the mega-cap AI players Microsoft and Alphabet rose 3.85% to $325 and 2.13% to $123 respectively, Advanced Micro Devices-AMD jumped about 11% to $120, Micron Technology-MU added 4.6% to $69, and Broadcom-AVGO climbed more than 7% to $728.

 

Artificial Intelligence (AI) frenzy:

Tech investors have turned to Artificial Intelligence (AI) space since last November when Microsoft-backed OpenAI released its ChatGPT bot.

Generative Artificial Intelligence (AI) is the technology that runs by ChatGPT that learns from analyzing vast datasets to generate text, images, and computer code, while businesses are trying to use generative AI to speed up video editing, recruitment, and even legal work.

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

Nvidia stock, Weekly chart

In this AI frenzy, tech-heavy Nasdaq Composite ended sharply higher by 1.7% to 12,698 points on Thursday as the positive earnings from NVIDIA boosted tech stocks that are exposed to the red-hot Artificial Intelligence (AI) space and other tech stocks that are exposed to them.

The Philadelphia SE Semiconductor index-SOX soared 6.8% to its highest level in more than a year in its biggest daily percentage rise since November given the bullish momentum on the sector as investors increased interest in the artificial intelligence race.

Adding to that, the mega-cap AI players Microsoft and Alphabet rose 3.85% to $325 and 2.13% to $123 respectively, Advanced Micro Devices-AMD jumped about 11% to $120, Micron Technology-MU added 4.6% to $69, and Broadcom-AVGO climbed more than 7% to $728.

 

Artificial Intelligence (AI) frenzy:

Tech investors have turned to Artificial Intelligence (AI) space since last November when Microsoft-backed OpenAI released its ChatGPT bot.

Generative Artificial Intelligence (AI) is the technology that runs by ChatGPT that learns from analyzing vast datasets to generate text, images, and computer code, while businesses are trying to use generative AI to speed up video editing, recruitment, and even legal work.

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

Nvidia stock, Weekly chart

In this AI frenzy, tech-heavy Nasdaq Composite ended sharply higher by 1.7% to 12,698 points on Thursday as the positive earnings from NVIDIA boosted tech stocks that are exposed to the red-hot Artificial Intelligence (AI) space and other tech stocks that are exposed to them.

The Philadelphia SE Semiconductor index-SOX soared 6.8% to its highest level in more than a year in its biggest daily percentage rise since November given the bullish momentum on the sector as investors increased interest in the artificial intelligence race.

Adding to that, the mega-cap AI players Microsoft and Alphabet rose 3.85% to $325 and 2.13% to $123 respectively, Advanced Micro Devices-AMD jumped about 11% to $120, Micron Technology-MU added 4.6% to $69, and Broadcom-AVGO climbed more than 7% to $728.

 

Artificial Intelligence (AI) frenzy:

Tech investors have turned to Artificial Intelligence (AI) space since last November when Microsoft-backed OpenAI released its ChatGPT bot.

Generative Artificial Intelligence (AI) is the technology that runs by ChatGPT that learns from analyzing vast datasets to generate text, images, and computer code, while businesses are trying to use generative AI to speed up video editing, recruitment, and even legal work.

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

Nvidia stock, Weekly chart

In this AI frenzy, tech-heavy Nasdaq Composite ended sharply higher by 1.7% to 12,698 points on Thursday as the positive earnings from NVIDIA boosted tech stocks that are exposed to the red-hot Artificial Intelligence (AI) space and other tech stocks that are exposed to them.

The Philadelphia SE Semiconductor index-SOX soared 6.8% to its highest level in more than a year in its biggest daily percentage rise since November given the bullish momentum on the sector as investors increased interest in the artificial intelligence race.

Adding to that, the mega-cap AI players Microsoft and Alphabet rose 3.85% to $325 and 2.13% to $123 respectively, Advanced Micro Devices-AMD jumped about 11% to $120, Micron Technology-MU added 4.6% to $69, and Broadcom-AVGO climbed more than 7% to $728.

 

Artificial Intelligence (AI) frenzy:

Tech investors have turned to Artificial Intelligence (AI) space since last November when Microsoft-backed OpenAI released its ChatGPT bot.

Generative Artificial Intelligence (AI) is the technology that runs by ChatGPT that learns from analyzing vast datasets to generate text, images, and computer code, while businesses are trying to use generative AI to speed up video editing, recruitment, and even legal work.

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

Nvidia Corp soared 24% to a record high close of $379, becoming the world’s most valuable listed chipmaker with a market cap of $940 billion after the company forecasted quarterly revenue 50% higher than estimates and said it was ramping up supply to meet the demand for its artificial intelligence (AI) chips.

Nvidia stock, Weekly chart

In this AI frenzy, tech-heavy Nasdaq Composite ended sharply higher by 1.7% to 12,698 points on Thursday as the positive earnings from NVIDIA boosted tech stocks that are exposed to the red-hot Artificial Intelligence (AI) space and other tech stocks that are exposed to them.

The Philadelphia SE Semiconductor index-SOX soared 6.8% to its highest level in more than a year in its biggest daily percentage rise since November given the bullish momentum on the sector as investors increased interest in the artificial intelligence race.

Adding to that, the mega-cap AI players Microsoft and Alphabet rose 3.85% to $325 and 2.13% to $123 respectively, Advanced Micro Devices-AMD jumped about 11% to $120, Micron Technology-MU added 4.6% to $69, and Broadcom-AVGO climbed more than 7% to $728.

 

Artificial Intelligence (AI) frenzy:

Tech investors have turned to Artificial Intelligence (AI) space since last November when Microsoft-backed OpenAI released its ChatGPT bot.

Generative Artificial Intelligence (AI) is the technology that runs by ChatGPT that learns from analyzing vast datasets to generate text, images, and computer code, while businesses are trying to use generative AI to speed up video editing, recruitment, and even legal work.

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

Nvidia Corp soared 24% to a record high close of $379, becoming the world’s most valuable listed chipmaker with a market cap of $940 billion after the company forecasted quarterly revenue 50% higher than estimates and said it was ramping up supply to meet the demand for its artificial intelligence (AI) chips.

Nvidia stock, Weekly chart

In this AI frenzy, tech-heavy Nasdaq Composite ended sharply higher by 1.7% to 12,698 points on Thursday as the positive earnings from NVIDIA boosted tech stocks that are exposed to the red-hot Artificial Intelligence (AI) space and other tech stocks that are exposed to them.

The Philadelphia SE Semiconductor index-SOX soared 6.8% to its highest level in more than a year in its biggest daily percentage rise since November given the bullish momentum on the sector as investors increased interest in the artificial intelligence race.

Adding to that, the mega-cap AI players Microsoft and Alphabet rose 3.85% to $325 and 2.13% to $123 respectively, Advanced Micro Devices-AMD jumped about 11% to $120, Micron Technology-MU added 4.6% to $69, and Broadcom-AVGO climbed more than 7% to $728.

 

Artificial Intelligence (AI) frenzy:

Tech investors have turned to Artificial Intelligence (AI) space since last November when Microsoft-backed OpenAI released its ChatGPT bot.

Generative Artificial Intelligence (AI) is the technology that runs by ChatGPT that learns from analyzing vast datasets to generate text, images, and computer code, while businesses are trying to use generative AI to speed up video editing, recruitment, and even legal work.

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

All eyes were on the technology sector yesterday as chipmaker Nvidia’s 24% gain ignited a strong rally into other Artificial Intelligence (AI)-exposed tech companies, and chip-heavy indices, and it increased the optimism in the technology sector against the current economic and political uncertainty.

Nvidia Corp soared 24% to a record high close of $379, becoming the world’s most valuable listed chipmaker with a market cap of $940 billion after the company forecasted quarterly revenue 50% higher than estimates and said it was ramping up supply to meet the demand for its artificial intelligence (AI) chips.

Nvidia stock, Weekly chart

In this AI frenzy, tech-heavy Nasdaq Composite ended sharply higher by 1.7% to 12,698 points on Thursday as the positive earnings from NVIDIA boosted tech stocks that are exposed to the red-hot Artificial Intelligence (AI) space and other tech stocks that are exposed to them.

The Philadelphia SE Semiconductor index-SOX soared 6.8% to its highest level in more than a year in its biggest daily percentage rise since November given the bullish momentum on the sector as investors increased interest in the artificial intelligence race.

Adding to that, the mega-cap AI players Microsoft and Alphabet rose 3.85% to $325 and 2.13% to $123 respectively, Advanced Micro Devices-AMD jumped about 11% to $120, Micron Technology-MU added 4.6% to $69, and Broadcom-AVGO climbed more than 7% to $728.

 

Artificial Intelligence (AI) frenzy:

Tech investors have turned to Artificial Intelligence (AI) space since last November when Microsoft-backed OpenAI released its ChatGPT bot.

Generative Artificial Intelligence (AI) is the technology that runs by ChatGPT that learns from analyzing vast datasets to generate text, images, and computer code, while businesses are trying to use generative AI to speed up video editing, recruitment, and even legal work.

Shares in Nvidia, AMD, and TSM which makes computer chips that train AI systems, have almost doubled since ChatGPT’s launch six months ago, while mega-cap stocks Microsoft, Micron, Broadcom, and Alphabet have gained over 50% in the same period.

U.S. dollar rises across the board on hawkish Fed and demand for safety

Posted on by Vrasidas Neofytou

Investors have also demanded the dollar’s safety against gold and bonds, following the failure of the Biden administration and Congress officials to deal with the increase of the U.S. debt ceiling before the deadline of June 1, when the Treasury has warned it would be unable to pay all its bills.

The resilient employment sector and the U.S. economy led investors to believe that Federal Reserve will leave interest rates higher for longer in its fight against persistent inflation, especially the Core inflation which is still soaring.

Investors have also demanded the dollar’s safety against gold and bonds, following the failure of the Biden administration and Congress officials to deal with the increase of the U.S. debt ceiling before the deadline of June 1, when the Treasury has warned it would be unable to pay all its bills.

The resilient employment sector and the U.S. economy led investors to believe that Federal Reserve will leave interest rates higher for longer in its fight against persistent inflation, especially the Core inflation which is still soaring.

Investors have also demanded the dollar’s safety against gold and bonds, following the failure of the Biden administration and Congress officials to deal with the increase of the U.S. debt ceiling before the deadline of June 1, when the Treasury has warned it would be unable to pay all its bills.

Adding to the above, China-exposed and commodities-sensitive currencies also retreated against the dollar, with the Australian and New Zealand dollars falling to a six-month low of $0.6530 and $0.6090 respectively.

The resilient employment sector and the U.S. economy led investors to believe that Federal Reserve will leave interest rates higher for longer in its fight against persistent inflation, especially the Core inflation which is still soaring.

Investors have also demanded the dollar’s safety against gold and bonds, following the failure of the Biden administration and Congress officials to deal with the increase of the U.S. debt ceiling before the deadline of June 1, when the Treasury has warned it would be unable to pay all its bills.

Adding to the above, China-exposed and commodities-sensitive currencies also retreated against the dollar, with the Australian and New Zealand dollars falling to a six-month low of $0.6530 and $0.6090 respectively.

The resilient employment sector and the U.S. economy led investors to believe that Federal Reserve will leave interest rates higher for longer in its fight against persistent inflation, especially the Core inflation which is still soaring.

Investors have also demanded the dollar’s safety against gold and bonds, following the failure of the Biden administration and Congress officials to deal with the increase of the U.S. debt ceiling before the deadline of June 1, when the Treasury has warned it would be unable to pay all its bills.

The dollar has also risen above the key 7 psychological level to the Chinese Yuan amid growing worries about the Chinese post-pandemic economic recovery and concerns over a renewed COVID wave in the country.

Adding to the above, China-exposed and commodities-sensitive currencies also retreated against the dollar, with the Australian and New Zealand dollars falling to a six-month low of $0.6530 and $0.6090 respectively.

The resilient employment sector and the U.S. economy led investors to believe that Federal Reserve will leave interest rates higher for longer in its fight against persistent inflation, especially the Core inflation which is still soaring.

Investors have also demanded the dollar’s safety against gold and bonds, following the failure of the Biden administration and Congress officials to deal with the increase of the U.S. debt ceiling before the deadline of June 1, when the Treasury has warned it would be unable to pay all its bills.

The dollar has also risen above the key 7 psychological level to the Chinese Yuan amid growing worries about the Chinese post-pandemic economic recovery and concerns over a renewed COVID wave in the country.

Adding to the above, China-exposed and commodities-sensitive currencies also retreated against the dollar, with the Australian and New Zealand dollars falling to a six-month low of $0.6530 and $0.6090 respectively.

The resilient employment sector and the U.S. economy led investors to believe that Federal Reserve will leave interest rates higher for longer in its fight against persistent inflation, especially the Core inflation which is still soaring.

Investors have also demanded the dollar’s safety against gold and bonds, following the failure of the Biden administration and Congress officials to deal with the increase of the U.S. debt ceiling before the deadline of June 1, when the Treasury has warned it would be unable to pay all its bills.

The bullish momentum has helped the dollar rise to a three-month high of $1.073 against the euro, to two-month highs of $1.2340 against the pound sterling, and a six-month peak of nearly ¥140 versus the Japanese Yen.

The dollar has also risen above the key 7 psychological level to the Chinese Yuan amid growing worries about the Chinese post-pandemic economic recovery and concerns over a renewed COVID wave in the country.

Adding to the above, China-exposed and commodities-sensitive currencies also retreated against the dollar, with the Australian and New Zealand dollars falling to a six-month low of $0.6530 and $0.6090 respectively.

The resilient employment sector and the U.S. economy led investors to believe that Federal Reserve will leave interest rates higher for longer in its fight against persistent inflation, especially the Core inflation which is still soaring.

Investors have also demanded the dollar’s safety against gold and bonds, following the failure of the Biden administration and Congress officials to deal with the increase of the U.S. debt ceiling before the deadline of June 1, when the Treasury has warned it would be unable to pay all its bills.

The bullish momentum has helped the dollar rise to a three-month high of $1.073 against the euro, to two-month highs of $1.2340 against the pound sterling, and a six-month peak of nearly ¥140 versus the Japanese Yen.

The dollar has also risen above the key 7 psychological level to the Chinese Yuan amid growing worries about the Chinese post-pandemic economic recovery and concerns over a renewed COVID wave in the country.

Adding to the above, China-exposed and commodities-sensitive currencies also retreated against the dollar, with the Australian and New Zealand dollars falling to a six-month low of $0.6530 and $0.6090 respectively.

The resilient employment sector and the U.S. economy led investors to believe that Federal Reserve will leave interest rates higher for longer in its fight against persistent inflation, especially the Core inflation which is still soaring.

Investors have also demanded the dollar’s safety against gold and bonds, following the failure of the Biden administration and Congress officials to deal with the increase of the U.S. debt ceiling before the deadline of June 1, when the Treasury has warned it would be unable to pay all its bills.

DXY-U.S. dollar index, 2-hour chart

The bullish momentum has helped the dollar rise to a three-month high of $1.073 against the euro, to two-month highs of $1.2340 against the pound sterling, and a six-month peak of nearly ¥140 versus the Japanese Yen.

The dollar has also risen above the key 7 psychological level to the Chinese Yuan amid growing worries about the Chinese post-pandemic economic recovery and concerns over a renewed COVID wave in the country.

Adding to the above, China-exposed and commodities-sensitive currencies also retreated against the dollar, with the Australian and New Zealand dollars falling to a six-month low of $0.6530 and $0.6090 respectively.

The resilient employment sector and the U.S. economy led investors to believe that Federal Reserve will leave interest rates higher for longer in its fight against persistent inflation, especially the Core inflation which is still soaring.

Investors have also demanded the dollar’s safety against gold and bonds, following the failure of the Biden administration and Congress officials to deal with the increase of the U.S. debt ceiling before the deadline of June 1, when the Treasury has warned it would be unable to pay all its bills.

DXY-U.S. dollar index, 2-hour chart

The bullish momentum has helped the dollar rise to a three-month high of $1.073 against the euro, to two-month highs of $1.2340 against the pound sterling, and a six-month peak of nearly ¥140 versus the Japanese Yen.

The dollar has also risen above the key 7 psychological level to the Chinese Yuan amid growing worries about the Chinese post-pandemic economic recovery and concerns over a renewed COVID wave in the country.

Adding to the above, China-exposed and commodities-sensitive currencies also retreated against the dollar, with the Australian and New Zealand dollars falling to a six-month low of $0.6530 and $0.6090 respectively.

The resilient employment sector and the U.S. economy led investors to believe that Federal Reserve will leave interest rates higher for longer in its fight against persistent inflation, especially the Core inflation which is still soaring.

Investors have also demanded the dollar’s safety against gold and bonds, following the failure of the Biden administration and Congress officials to deal with the increase of the U.S. debt ceiling before the deadline of June 1, when the Treasury has warned it would be unable to pay all its bills.

DXY-U.S. dollar index, 2-hour chart

The bullish momentum has helped the dollar rise to a three-month high of $1.073 against the euro, to two-month highs of $1.2340 against the pound sterling, and a six-month peak of nearly ¥140 versus the Japanese Yen.

The dollar has also risen above the key 7 psychological level to the Chinese Yuan amid growing worries about the Chinese post-pandemic economic recovery and concerns over a renewed COVID wave in the country.

Adding to the above, China-exposed and commodities-sensitive currencies also retreated against the dollar, with the Australian and New Zealand dollars falling to a six-month low of $0.6530 and $0.6090 respectively.

The resilient employment sector and the U.S. economy led investors to believe that Federal Reserve will leave interest rates higher for longer in its fight against persistent inflation, especially the Core inflation which is still soaring.

Investors have also demanded the dollar’s safety against gold and bonds, following the failure of the Biden administration and Congress officials to deal with the increase of the U.S. debt ceiling before the deadline of June 1, when the Treasury has warned it would be unable to pay all its bills.

DXY-U.S. dollar index which tracks the greenback against six major currencies, has recovered above the 104 level on Thursday morning for the first time since early March, and managing to recover the half losses of March-April’s U.S. banking turmoil.

DXY-U.S. dollar index, 2-hour chart

The bullish momentum has helped the dollar rise to a three-month high of $1.073 against the euro, to two-month highs of $1.2340 against the pound sterling, and a six-month peak of nearly ¥140 versus the Japanese Yen.

The dollar has also risen above the key 7 psychological level to the Chinese Yuan amid growing worries about the Chinese post-pandemic economic recovery and concerns over a renewed COVID wave in the country.

Adding to the above, China-exposed and commodities-sensitive currencies also retreated against the dollar, with the Australian and New Zealand dollars falling to a six-month low of $0.6530 and $0.6090 respectively.

The resilient employment sector and the U.S. economy led investors to believe that Federal Reserve will leave interest rates higher for longer in its fight against persistent inflation, especially the Core inflation which is still soaring.

Investors have also demanded the dollar’s safety against gold and bonds, following the failure of the Biden administration and Congress officials to deal with the increase of the U.S. debt ceiling before the deadline of June 1, when the Treasury has warned it would be unable to pay all its bills.

DXY-U.S. dollar index which tracks the greenback against six major currencies, has recovered above the 104 level on Thursday morning for the first time since early March, and managing to recover the half losses of March-April’s U.S. banking turmoil.

DXY-U.S. dollar index, 2-hour chart

The bullish momentum has helped the dollar rise to a three-month high of $1.073 against the euro, to two-month highs of $1.2340 against the pound sterling, and a six-month peak of nearly ¥140 versus the Japanese Yen.

The dollar has also risen above the key 7 psychological level to the Chinese Yuan amid growing worries about the Chinese post-pandemic economic recovery and concerns over a renewed COVID wave in the country.

Adding to the above, China-exposed and commodities-sensitive currencies also retreated against the dollar, with the Australian and New Zealand dollars falling to a six-month low of $0.6530 and $0.6090 respectively.

The resilient employment sector and the U.S. economy led investors to believe that Federal Reserve will leave interest rates higher for longer in its fight against persistent inflation, especially the Core inflation which is still soaring.

Investors have also demanded the dollar’s safety against gold and bonds, following the failure of the Biden administration and Congress officials to deal with the increase of the U.S. debt ceiling before the deadline of June 1, when the Treasury has warned it would be unable to pay all its bills.

The U.S. dollar thrives in May (so far) driven by some hawkish comments from Fed officials, coupled win an increasing demand for safety among investors on economic and political uncertainties around the world, posting a series of multi-month highs against major peers.

DXY-U.S. dollar index which tracks the greenback against six major currencies, has recovered above the 104 level on Thursday morning for the first time since early March, and managing to recover the half losses of March-April’s U.S. banking turmoil.

DXY-U.S. dollar index, 2-hour chart

The bullish momentum has helped the dollar rise to a three-month high of $1.073 against the euro, to two-month highs of $1.2340 against the pound sterling, and a six-month peak of nearly ¥140 versus the Japanese Yen.

The dollar has also risen above the key 7 psychological level to the Chinese Yuan amid growing worries about the Chinese post-pandemic economic recovery and concerns over a renewed COVID wave in the country.

Adding to the above, China-exposed and commodities-sensitive currencies also retreated against the dollar, with the Australian and New Zealand dollars falling to a six-month low of $0.6530 and $0.6090 respectively.

The resilient employment sector and the U.S. economy led investors to believe that Federal Reserve will leave interest rates higher for longer in its fight against persistent inflation, especially the Core inflation which is still soaring.

Investors have also demanded the dollar’s safety against gold and bonds, following the failure of the Biden administration and Congress officials to deal with the increase of the U.S. debt ceiling before the deadline of June 1, when the Treasury has warned it would be unable to pay all its bills.

Sterling fluctuates after slower-than-expected fall of the UK inflation

Posted on by Vrasidas Neofytou

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

The closely watched Core inflation, which excludes volatile food, energy, alcohol, and tobacco prices, jumped up to 6.8% y-y in April 2023, its highest since March 1992, creating a big headage for the Bank of England.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

The closely watched Core inflation, which excludes volatile food, energy, alcohol, and tobacco prices, jumped up to 6.8% y-y in April 2023, its highest since March 1992, creating a big headage for the Bank of England.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

Sticky Core Inflation in April:

The closely watched Core inflation, which excludes volatile food, energy, alcohol, and tobacco prices, jumped up to 6.8% y-y in April 2023, its highest since March 1992, creating a big headage for the Bank of England.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

 

Sticky Core Inflation in April:

The closely watched Core inflation, which excludes volatile food, energy, alcohol, and tobacco prices, jumped up to 6.8% y-y in April 2023, its highest since March 1992, creating a big headage for the Bank of England.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

In the same period, inflation rates slowed to 5% in the U.S. and 6.9% in Eurozone, indicating that the UK economy is experiencing the highest rate of inflation among Group of Seven advanced economies along with Italy, despite the falling energy prices.

 

Sticky Core Inflation in April:

The closely watched Core inflation, which excludes volatile food, energy, alcohol, and tobacco prices, jumped up to 6.8% y-y in April 2023, its highest since March 1992, creating a big headage for the Bank of England.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

In the same period, inflation rates slowed to 5% in the U.S. and 6.9% in Eurozone, indicating that the UK economy is experiencing the highest rate of inflation among Group of Seven advanced economies along with Italy, despite the falling energy prices.

 

Sticky Core Inflation in April:

The closely watched Core inflation, which excludes volatile food, energy, alcohol, and tobacco prices, jumped up to 6.8% y-y in April 2023, its highest since March 1992, creating a big headage for the Bank of England.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

UK inflation had remained above 10% for eight of the past nine months, worsened by soaring energy, and food costs, and shortages in the labor market linked to Brexit, which was keeping wages high.

In the same period, inflation rates slowed to 5% in the U.S. and 6.9% in Eurozone, indicating that the UK economy is experiencing the highest rate of inflation among Group of Seven advanced economies along with Italy, despite the falling energy prices.

 

Sticky Core Inflation in April:

The closely watched Core inflation, which excludes volatile food, energy, alcohol, and tobacco prices, jumped up to 6.8% y-y in April 2023, its highest since March 1992, creating a big headage for the Bank of England.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

 

UK inflation had remained above 10% for eight of the past nine months, worsened by soaring energy, and food costs, and shortages in the labor market linked to Brexit, which was keeping wages high.

In the same period, inflation rates slowed to 5% in the U.S. and 6.9% in Eurozone, indicating that the UK economy is experiencing the highest rate of inflation among Group of Seven advanced economies along with Italy, despite the falling energy prices.

 

Sticky Core Inflation in April:

The closely watched Core inflation, which excludes volatile food, energy, alcohol, and tobacco prices, jumped up to 6.8% y-y in April 2023, its highest since March 1992, creating a big headage for the Bank of England.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

 

UK inflation had remained above 10% for eight of the past nine months, worsened by soaring energy, and food costs, and shortages in the labor market linked to Brexit, which was keeping wages high.

In the same period, inflation rates slowed to 5% in the U.S. and 6.9% in Eurozone, indicating that the UK economy is experiencing the highest rate of inflation among Group of Seven advanced economies along with Italy, despite the falling energy prices.

 

Sticky Core Inflation in April:

The closely watched Core inflation, which excludes volatile food, energy, alcohol, and tobacco prices, jumped up to 6.8% y-y in April 2023, its highest since March 1992, creating a big headage for the Bank of England.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

 

UK inflation had remained above 10% for eight of the past nine months, worsened by soaring energy, and food costs, and shortages in the labor market linked to Brexit, which was keeping wages high.

In the same period, inflation rates slowed to 5% in the U.S. and 6.9% in Eurozone, indicating that the UK economy is experiencing the highest rate of inflation among Group of Seven advanced economies along with Italy, despite the falling energy prices.

 

Sticky Core Inflation in April:

The closely watched Core inflation, which excludes volatile food, energy, alcohol, and tobacco prices, jumped up to 6.8% y-y in April 2023, its highest since March 1992, creating a big headage for the Bank of England.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

The largest contributor to the decline was housing and household services, which owes to a steep fall in natural gas and electricity prices, as per the chart below:

 

UK inflation had remained above 10% for eight of the past nine months, worsened by soaring energy, and food costs, and shortages in the labor market linked to Brexit, which was keeping wages high.

In the same period, inflation rates slowed to 5% in the U.S. and 6.9% in Eurozone, indicating that the UK economy is experiencing the highest rate of inflation among Group of Seven advanced economies along with Italy, despite the falling energy prices.

 

Sticky Core Inflation in April:

The closely watched Core inflation, which excludes volatile food, energy, alcohol, and tobacco prices, jumped up to 6.8% y-y in April 2023, its highest since March 1992, creating a big headage for the Bank of England.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

The largest contributor to the decline was housing and household services, which owes to a steep fall in natural gas and electricity prices, as per the chart below:

 

UK inflation had remained above 10% for eight of the past nine months, worsened by soaring energy, and food costs, and shortages in the labor market linked to Brexit, which was keeping wages high.

In the same period, inflation rates slowed to 5% in the U.S. and 6.9% in Eurozone, indicating that the UK economy is experiencing the highest rate of inflation among Group of Seven advanced economies along with Italy, despite the falling energy prices.

 

Sticky Core Inflation in April:

The closely watched Core inflation, which excludes volatile food, energy, alcohol, and tobacco prices, jumped up to 6.8% y-y in April 2023, its highest since March 1992, creating a big headage for the Bank of England.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

Even though U.K. headline annual inflation may have slowed in April at 8.7% from 10.1% in March, it is still above market expectations of a fall at 8.2%, unlikely what BOE governor Bailey was hoping for when he said that “inflation has turned the corner” in his remarks yesterday.

The largest contributor to the decline was housing and household services, which owes to a steep fall in natural gas and electricity prices, as per the chart below:

 

UK inflation had remained above 10% for eight of the past nine months, worsened by soaring energy, and food costs, and shortages in the labor market linked to Brexit, which was keeping wages high.

In the same period, inflation rates slowed to 5% in the U.S. and 6.9% in Eurozone, indicating that the UK economy is experiencing the highest rate of inflation among Group of Seven advanced economies along with Italy, despite the falling energy prices.

 

Sticky Core Inflation in April:

The closely watched Core inflation, which excludes volatile food, energy, alcohol, and tobacco prices, jumped up to 6.8% y-y in April 2023, its highest since March 1992, creating a big headage for the Bank of England.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

Even though U.K. headline annual inflation may have slowed in April at 8.7% from 10.1% in March, it is still above market expectations of a fall at 8.2%, unlikely what BOE governor Bailey was hoping for when he said that “inflation has turned the corner” in his remarks yesterday.

The largest contributor to the decline was housing and household services, which owes to a steep fall in natural gas and electricity prices, as per the chart below:

 

UK inflation had remained above 10% for eight of the past nine months, worsened by soaring energy, and food costs, and shortages in the labor market linked to Brexit, which was keeping wages high.

In the same period, inflation rates slowed to 5% in the U.S. and 6.9% in Eurozone, indicating that the UK economy is experiencing the highest rate of inflation among Group of Seven advanced economies along with Italy, despite the falling energy prices.

 

Sticky Core Inflation in April:

The closely watched Core inflation, which excludes volatile food, energy, alcohol, and tobacco prices, jumped up to 6.8% y-y in April 2023, its highest since March 1992, creating a big headage for the Bank of England.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

Even though U.K. headline annual inflation may have slowed in April at 8.7% from 10.1% in March, it is still above market expectations of a fall at 8.2%, unlikely what BOE governor Bailey was hoping for when he said that “inflation has turned the corner” in his remarks yesterday.

The largest contributor to the decline was housing and household services, which owes to a steep fall in natural gas and electricity prices, as per the chart below:

 

UK inflation had remained above 10% for eight of the past nine months, worsened by soaring energy, and food costs, and shortages in the labor market linked to Brexit, which was keeping wages high.

In the same period, inflation rates slowed to 5% in the U.S. and 6.9% in Eurozone, indicating that the UK economy is experiencing the highest rate of inflation among Group of Seven advanced economies along with Italy, despite the falling energy prices.

 

Sticky Core Inflation in April:

The closely watched Core inflation, which excludes volatile food, energy, alcohol, and tobacco prices, jumped up to 6.8% y-y in April 2023, its highest since March 1992, creating a big headage for the Bank of England.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

Even though U.K. headline annual inflation may have slowed in April at 8.7% from 10.1% in March, it is still above market expectations of a fall at 8.2%, unlikely what BOE governor Bailey was hoping for when he said that “inflation has turned the corner” in his remarks yesterday.

The largest contributor to the decline was housing and household services, which owes to a steep fall in natural gas and electricity prices, as per the chart below:

 

UK inflation had remained above 10% for eight of the past nine months, worsened by soaring energy, and food costs, and shortages in the labor market linked to Brexit, which was keeping wages high.

In the same period, inflation rates slowed to 5% in the U.S. and 6.9% in Eurozone, indicating that the UK economy is experiencing the highest rate of inflation among Group of Seven advanced economies along with Italy, despite the falling energy prices.

 

Sticky Core Inflation in April:

The closely watched Core inflation, which excludes volatile food, energy, alcohol, and tobacco prices, jumped up to 6.8% y-y in April 2023, its highest since March 1992, creating a big headage for the Bank of England.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

However, the Sterling gave back some of those initial gains retreating to the $1.24 mark, after investors saw that headline inflation slowed less-than-expected, while Core inflation jumped higher than expected, which is adding pressure on the Bank of England for more rate hikes to curb resilient inflation.

Even though U.K. headline annual inflation may have slowed in April at 8.7% from 10.1% in March, it is still above market expectations of a fall at 8.2%, unlikely what BOE governor Bailey was hoping for when he said that “inflation has turned the corner” in his remarks yesterday.

The largest contributor to the decline was housing and household services, which owes to a steep fall in natural gas and electricity prices, as per the chart below:

 

UK inflation had remained above 10% for eight of the past nine months, worsened by soaring energy, and food costs, and shortages in the labor market linked to Brexit, which was keeping wages high.

In the same period, inflation rates slowed to 5% in the U.S. and 6.9% in Eurozone, indicating that the UK economy is experiencing the highest rate of inflation among Group of Seven advanced economies along with Italy, despite the falling energy prices.

 

Sticky Core Inflation in April:

The closely watched Core inflation, which excludes volatile food, energy, alcohol, and tobacco prices, jumped up to 6.8% y-y in April 2023, its highest since March 1992, creating a big headage for the Bank of England.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

However, the Sterling gave back some of those initial gains retreating to the $1.24 mark, after investors saw that headline inflation slowed less-than-expected, while Core inflation jumped higher than expected, which is adding pressure on the Bank of England for more rate hikes to curb resilient inflation.

Even though U.K. headline annual inflation may have slowed in April at 8.7% from 10.1% in March, it is still above market expectations of a fall at 8.2%, unlikely what BOE governor Bailey was hoping for when he said that “inflation has turned the corner” in his remarks yesterday.

The largest contributor to the decline was housing and household services, which owes to a steep fall in natural gas and electricity prices, as per the chart below:

 

UK inflation had remained above 10% for eight of the past nine months, worsened by soaring energy, and food costs, and shortages in the labor market linked to Brexit, which was keeping wages high.

In the same period, inflation rates slowed to 5% in the U.S. and 6.9% in Eurozone, indicating that the UK economy is experiencing the highest rate of inflation among Group of Seven advanced economies along with Italy, despite the falling energy prices.

 

Sticky Core Inflation in April:

The closely watched Core inflation, which excludes volatile food, energy, alcohol, and tobacco prices, jumped up to 6.8% y-y in April 2023, its highest since March 1992, creating a big headage for the Bank of England.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

Pound Sterling initially jumped as high as $1.2470 a dollar on Wednesday morning after the release of the report that showed UK inflation fell below 10% in April, with investors cheering the fall in single digits.

However, the Sterling gave back some of those initial gains retreating to the $1.24 mark, after investors saw that headline inflation slowed less-than-expected, while Core inflation jumped higher than expected, which is adding pressure on the Bank of England for more rate hikes to curb resilient inflation.

Even though U.K. headline annual inflation may have slowed in April at 8.7% from 10.1% in March, it is still above market expectations of a fall at 8.2%, unlikely what BOE governor Bailey was hoping for when he said that “inflation has turned the corner” in his remarks yesterday.

The largest contributor to the decline was housing and household services, which owes to a steep fall in natural gas and electricity prices, as per the chart below:

 

UK inflation had remained above 10% for eight of the past nine months, worsened by soaring energy, and food costs, and shortages in the labor market linked to Brexit, which was keeping wages high.

In the same period, inflation rates slowed to 5% in the U.S. and 6.9% in Eurozone, indicating that the UK economy is experiencing the highest rate of inflation among Group of Seven advanced economies along with Italy, despite the falling energy prices.

 

Sticky Core Inflation in April:

The closely watched Core inflation, which excludes volatile food, energy, alcohol, and tobacco prices, jumped up to 6.8% y-y in April 2023, its highest since March 1992, creating a big headage for the Bank of England.

BoE’s rate hikes to 4.50% and the prolonged tightening cycle seem to have failed to pause the elevating Core inflation in the UK, with investors now expecting another 25bps rate hike next month to 4.75% (June 22).

Bank of England Governor Andrew Bailey is set to speak later in the day, and he could give some signals about future monetary plans to get inflation down.

However, it’s not clear whether BoE can hike more, since it could create an adverse impact to the economic outlook for the UK, especially after weak PMI Manufacturing activity in April which came at 46.9 vs 47.9 market expectation.

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