The dollar maintains its gains thanks to the state of the safe haven

Disappointing Chinese data in the Asian session

Euro falls, ignoring expectations of rate hike in July

Powell’s comments and inflation data from Canada and the United Kingdom are the main events of the week

After US inflation figures topped the events of last week, global markets return to opening in a new week today, Monday, May 16th, with new data, led by inflation figures also in the United Kingdom and Canada, in addition to statements by Federal Reserve Chairman Jerome Powell and Fed members during the week and sales figures. American retail and the Australian labor market.

Inflation data released last week from the United States of America, which came down in April Annual inflation in the United States of America fell in April (fayezalajmi-4x.com) Played a major role in the movements of the currency markets last week, as although the markets saw that inflation has It reached its peak in April, but its decline, which came higher than market expectations, kept expectations of the pace of the US Federal Reserve tightening monetary policy and raising interest rates at least in the next two meetings in June-July by 50 basis points.

With about a month remaining from the Federal Reserve’s meeting on the 15th of next June, the futures markets are priced according to the CME, that the Fed will raise interest rates by 50 basis points by 90%, while it is priced at 10% that the Fed will raise interest rates by 75 basis points and between This percentage and that will move the US dollar before the date of the meeting.

Market concerns also about the possibility of a possible global economic recession due to the impact of the Russian-Ukrainian war and the continuous rises in inflation caused by the problems of global supply chains and the closures that occur in the second largest global economy due to the spread of the Corona virus also had the greatest impact in raising the state of anxiety and tension and the rise in safe havens last week Which is led by the US dollar.

With the rise of these concerns, many institutions and companies began to reduce their expectations for the growth of the global and American economy, the latest of which was the investment bank Goldman Sachs, which lowered its forecast for the growth of the American economy to 2.4% this year, compared to 2.6% in previous estimates, and a growth of 1.6% next year 2023, compared to 2.2% in previous estimates.

The general index of the US dollar managed to close its sixth consecutive week in the green with gains of about 0.75% last week, in the longest series of weekly gains since 2014, trading at its highest level since December 2002.

China reports disappointing data

Data released this morning, Monday, from the second largest economy in the world revealed the extent of the damage caused by controls and measures to limit the spread of the Corona virus since the beginning of the second quarter of this year, as retail sales fell by 11.1% in April, compared to a decline of about 3.5% in March, exceeding expectations that It indicated a decline to 6.2%, and industrial production declined by 2.9%, compared to 5% in the March reading, at a time when expectations indicated a rise to 7%.

Unemployment rates in China rose to 6.7% in the 31 largest cities in China, compared to 5.8% in March, which reflects the impact of the closure in the largest Chinese cities such as Shanghai, which began on Sunday only to allow restaurants to gradually reopen their doors.

The euro slips as the European Union cuts its forecast for eurozone growth

The euro fell against the US dollar by about 150 points last week, recording losses for the sixth consecutive week and trading at its lowest level since January 2017, ignoring the high market expectations that the European Central Bank will start raising interest rates at its meeting in July with inflation rates reaching record levels in April.

The euro’s fears and declines come from expectations of a decline in economic growth, as the European economy is directly affected by the Russian invasion of Ukraine, and this reflected the European Union’s fears by reducing its expectations for the growth of the eurozone economy this year to 2.7%, compared to 4% in February estimates and 2.3% next year compared to 2.7%.

On the other hand, the Economic Committee of the European Union raised its expectations regarding inflation rates to 6.1% and 2.7% this year and next, respectively, compared to 3.5% and 1.7% in previous forecasts.

Canadian and UK inflation data and US retail sales are the main highlights of the week

During the sessions of this week, the markets will monitor sporadic data with the absence of central bank meetings, as the markets will monitor the statements of US Federal Reserve Chairman Jerome Powell tomorrow, Tuesday, in the American session, in addition to the US retail sales figures. On Wednesday, attention is directed to inflation data from Britain and Canada before the Australian labor market figures are released. In (the change in employment and the unemployment rate) next Thursday morning, in addition to sporadic data in the American session, such as weekly unemployment benefits, the Philadelphia manufacturing index and home sales, while we conclude the week with retail sales from the United Kingdom, which will be released Friday in the European session.

You can follow the economic calendar on the website at the link The Economic Calendar – Fayez Al-Ajmi (fayezalajmi-4x.com)