PREVIOUS TRADING DAY EVENTS 18 May 2023

Announcements  

Unemployment claims were reported lower during yesterdays figure release. It actually fell more than expected, suggesting that the labour market remains strong. This sign of labourmarket resilience reduces fears of recession. 

Recent previous claims data boosting the figures upwards were distorted actually by fraudulent applications.

The labour market is not deteriorating like we had thought as jobless claims were pumped up to recession levels by fraudulent applications for unemployment benefits, said Christopher Rupkey, chief economist at FWDBONDS in New York.

The USD appreciated greatly against other currencies as investors switched their expectations. Economists widely expect unemployment to climb higher with steeper interest rates.

The Federal Reserve is watching closely the labour market data, assessing the possibility of a hike. Without any relevant statement from policymakers, the market still expects that the Fed will keep interest rates untouched next month for the first time.

While we expect the Fed to leave rates steady at its June meeting, a resumption of rate hikes cant be ruled out if labour market conditions dont ease more significantly, said Nancy Vanden Houten, lead U.S. economist at Oxford Economics in New York.

The Philadelphia Feds general activity index figure reported a lower negative figure, 10.4 this month, from 31.3 in April. A reading below zero indicates contraction, however the…