PREVIOUS TRADING DAY EVENTS 16 June 2023

Announcements

The U.S. survey which asks respondents to rate the relative level of current and future economic conditions, University of Michigan UoM Consumer Sentiment survey has shown a higher index figure, 63.9 and it was above the expected figure. Shortterm inflation expectations fell, driving U.S. consumer sentiment higher. Expected annual rate of price increase is at 3.3 over the next year, down from the 4.2 expected in May.

Annual consumer and producer prices retreated significantly in May, mainly because of lower energy costs. The Fed on Wednesday left its policy rate unchanged. However, policymakers stated that borrowing costs should remain high. Increases in interest rates are likely to continue after this pause since inflation is still above the Feds 2 target. Financial markets are betting that the central bank will raise interest rates only one more time this year, according to the CMEGroups Fedwatch tool.

So far the data pointed out that consumer spending is likely to continue at a steady pace. Higher prices and borrowing costs did not have too much impact on spending since wages rose higher. Retail sales figures last week were actually supporting this fact.   

Consumers are becoming believers in an economy now marked by strong job growth and lower inflation, said Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Virginia.

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