But says that North Korea is not likely to test a nuclear weapon this weekend while US president Biden visits Seoul. Adding that US military “strategic assets” are ready to be mobilised if North Korea does stage a serious provocation during the period. Just putting this out there in case there is anything to it on the risk/geopolitical front.
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rssUS Treas Sec Yellen said the US & Europe should to end their reliance on China
S Treasury Secretary Janet Yellen was speaking Tuesday at the Brussels Economic Forum
- said the U.S. and Europe should seek to end their reliance on China for commodities such as rare-earth minerals
- also called more broadly for Western countries and their allies to shift trading relations away from potential global rivals
- Yellen pointed to Russia’s invasion of Ukraine as she argued that countries shouldn’t make themselves beholden to Russia or China for critical commodities such as oil
Info comes via the Wall Street Journal (may be gated).
Japan GDP preliminary for Q1 2022: -0.2% q/q (vs. expected -0.4%)
Japan GDP preliminary for Q1 2022
GDP sa -0.2% q/q
- expected -0.4%, prior +1.1%
GDP annualised sa -1.0% y/y
- expected -1.8%, prior +4.6%
GDP deflator (an inflation indication) -0.4% y/y
- expected -1.2%, prior -1.3%
Private consumption 0.0% q/q
- expected -0.5% q/q, prior 2.4%
Business spending 0.5% q/q
- expected 0.7%, prior 0.3%
External demand -0.4% q/q
expected -0.3%, prior 0.2%
more to come
Thought For A Day
Powell highlights the FOMC calendar today
The Fed’s Ballard has been speaking over the last hour and most-recently said the FEd should be prepared to manage inflation on its own and that if prices moderate naturally, then the Fed can do less.
Here’s the remainder of the calendar:
- Fed Harker 9.15am ET
- Powell at 2.00pm ET
- Mester at 2.30pm ET
- Evans at 6.45pm ET
Powell’s appearance is a conversation with the WSJ.
China lockdowns to weigh significantly further on economic activity – S&P Global
On the revision, the agency says that the continued strict lockdowns are biting at economic activity across the country, leading to weaker growth in general. Domestic employment, investor sentiment, supply chains, and broader capital markets are all being impacted and the mounting confluence of credit headwinds from tighter Fed policy and the Russia-Ukraine conflict heightens the risks.
The base case for their China 2022 GDP growth forecast is now 4.2% from 4.9% previously. But in the event where lockdowns extend to another “economically important” city, the growth rate could fall to 3.5%.
Shanghai says no new coronavirus cases outside quarantine for 3rd day in a row
Reassuring noises coming from Shanghai this morning. Authorities there say there have been no new coronavirus cases outside quarantine for the 3rd day in a row.
Yesterday the city foreshadowed easing restrictions from the 22nd of May:
The numbers today are reassurance the reopening moves (small but at least its a start) are on track.
USD is a touch softer the past few minutes, EUR/USD as an example:
Goldman not forecasting 4900 as YE target for S&P 500 anymore 👇 (Goldman Sachs)
Eye-opening chart, Eurozone energy imports from Russia 👇 Regardless if one likes it or not, talk is cheap, reality is tough.
Reserve Bank of New Zealand to hike its cash rate by 50bps next week – preview
Some comments from ANZ’s preview of the Reserve Bank of New Zealand monetary policy meeting coming up on 25 May 2022 (the RBNZ will issue a Monetary Policy Statement and follow up with a Media Conference from Governor Orr).
- We expect the RBNZ will raise the Official Cash Rate (OCR) 50bp to 2.00%
- Beyond that, the path is murkier. We continue to expect the RBNZ to switch to the more usual pace of 25bp hikes from July onward as evidence mounts that demand is cooling.
- However, if any more upside surprises to inflation emerge, the hurdle for another 50-pointer in July is low.
RBNZ tightening began last year, on October 6:
