UK retail sales rose higher-than-expected this morning having increased 0.5% on a month-on-month basis for April. This beat market expectations of a 0.3% rise and came after a 1.2% fall last month.
Investor sentiment across US equity markets were buoyed yesterday on some progress made around debt ceiling talks. According to some sources the Republican and Democratic negotiators are just $70bn apart on a possible deal. AI related stocks were also lifted by chipmaker Nvidia’s share price rising some 24% following strong Q1 results. More generally, yesterday’s session saw the S&P 500 close 0.88% higher while the tech heavy Nasdaq rose 1.71%. In the UK however, the FTSE 100 ended Thursday 0.7% lower with the index being weighed down by the prospect of further hikes from the BoE.
Oil Prices Decline Following Novak’s Comments
Yesterday saw oil prices slide over 3% as the Russian Deputy Prime Minister Alexander Novak provided comments which contrasted with previous remarks from the Saudi energy minister around further possible cuts from OPEC+. Earlier this month, the Saudi energy minister Prince Abdulaziz bin Salman would make further cuts ahead of their next meeting on 4th June. However, yesterday Novak seemed to downplay the prospect of these cuts saying that he did not think these were likely. WTI crude futures are currently trading around $72 dpb. Earlier this year, OPEC+ said that they would look to reduce output by some 1.16 million barrels per day from May until the end of 2023.
As Q1 GDP beat expectations, corporate profits over Q1 saw a considerable decline, falling 6.8% to their lowest level since Q2 2021. The scale of the decline far surpassed expectations of a 0.9% fall, though this data includes profits from the Federal Reserve which given losses on their gargantuan bond portfolio (brought about by rising interest rates), means the data is heavily skewed by the Fed’s weight. In fact, when we discount for the Federal Reserve, corporate profits hit an all-time high, though the pace of growth slowed from previous quarters.
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Travel Tuesday, motion supported by Hungarian parliament to allow Sweden to join Nato, Trump's legal bill continues to grow interest with US monetary conditions at their tightest level in 22 years, and today's data.
Macro Monday, report from the BCC on the impact on British businesses from Red Sea disruption, Ukraine president announces number of deaths since the Russian full-scale invasion, and data releases today.
Friday feeling, what's happened in the last two years of the Russia-Ukraine conflict, and more hawkish views from the Fed.
Thought for Thursday, House of Commons ceasefire vote decision, minutes released from Federal Reserve monetary policy meeting, geo-political update in Russia and Gaza, and looking at today's data.
Word of the week Wednesday, data indicates public sector net borrowing in surplus, this afternoons House of Commons vote for a ceasefire in Gaza, and release of FOMC policy me.eting minutes
Travel Tuesday, changes for China's property market, attacks on Red Sea Vessels cause further shipping disruption, EU defensive naval operation launched, and US propose a UN Security Council Resolution in the Middle East.
Macro Monday, update on Israel-Gaza conflict, town in Ukraine in full control of Russian forces, and pressure for creation of more public-private partnerships in the UK from insurers.
Friday Feeling, Labour take comfort in by-election results, potential for income tax cut plans to be dropped, president of European Commission speaks on European Union defence production.