PREVIOUS TRADING DAY EVENTS 10 May 2023

Announcements 

The U.S. annual consumer price growth fell to below 5. It slowed down in April for the first time in two years, supporting the idea for the central bank to pause further interest rate hikes next month. The U.S. central bank raised its benchmark overnight interest rate by another 25 basis points to the 5.005.25 range last week and declared that it will probably pause hikes.

Todays consumer inflation report supports the case for the Fed to seriously contemplate a pause in rate hikes in June, but does not support any nearterm rate cuts, said Scott Anderson, chief economist at the Bank of the West in San Francisco.

Risks of a recession have increased, because of the Feds rate hikes, tightening credit conditions and recent discussions for raising the debt ceiling.

The Consumer Price Index CPI rose by 0.4 last month after gaining 0.1 in March, in line with expectations. Inflation remains strong and way above target.

On balance, inflation is still too high and it is not going to fall back to 2 if it increases 0.4 a month, said Chris Low, chief economist at FHN Financial in New York. We need to see steady increases around 0.15 to get there.

Stocks on Wall Street gained as annual inflation was not reported high, almost in line with expectations, thus, expecting lower future borrowing costs. Recent employment reports showed a resilient and strong labour market.

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