PREVIOUS TRADING DAY EVENTS 29 June 2023

In the U.S., the number of new claims for unemployment benefits fell last week by the most in 20 months. 

An unexpected decline signalled that the Federal Reserve will resume raising interest rates in July. This persistent labour market strength is helping the economy to get out of a potential recession since the Fed aggressively increased rates to bring inflation down.  

From the GDP figures, we see that the economy grew faster than what was estimated in the first quarter. Data coincide with the economic resilience and strong U.S. labour market, as recent data suggests. Reports this month are showing betterthanexpected employment growth in May as well as retail sales gains and higher numbers in housing starts.

The economy is currently displaying genuine signs of resilience, said Gregory Daco, chief economist at EYParthenon in New York. This is leading many to rightly question whether the longforecast recession is truly inevitable, or whether a soft landing of the economy is possible.

For now, there is no sign of a substantial deterioration in demand for workers, said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York.

Fed Chair Jerome Powell said at an event hosted by the Spanish central bank in Madrid on Thursday that we expect the moderate pace of interest rate decisions to continue, after pausing in June.

While the economy will struggle in response to the Feds actions slow…