Delta variant cases increased in the UK, but hospital admissions were largely unaffected. The low hospital admissions are thought to be due to the high vaccination rates of older cohorts in this country. With many other countries now vulnerable to this more contagious variant, questions around their vaccine strategy and how welcome the UK tourist might be this summer are being raised.
Bitcoin broke the $30,000 level and subsequently rebounded. This level had been viewed as significant. Additionally, the forward markets now trade with much less of a premium to the spot Bitcoin market, indicating fewer speculative longs and cleaner positioning.
Canada
Core retail sales disappointed at -7.2% MoM (-4.6% exp., 4.3% prev.), but was largely a reflection of Aprils lockdown restrictions.
USA
Core PCE deflator, the Federal reserve’s preferred inflation measure, printed lower than expectations at +0.5% MoM (0.6% exp., 0.7% prev.) taking the YoY number to +3.4% (3.4% exp., 3.1% prev.) These prints are elevated in comparison with recent history, but they are a long way away from the levels attained in the 1960s and ‘70s and some arguments suggest we are approaching or have passed peak impulse to inflation for this cycle. There were many speakers from the Federal Reserve, the most influential of which were in keeping with the previous weeks’ policy statement and press conference. PMIs were expansionary, but slightly lower than the previous month.
Eurozone
Eurozone wide PMIs were expansionary and beat expectations. French PMIs were expansionary, but slightly lower than expectations. Business confidence beat expectations. German PMIs were expansionary and beat expectations. The IFO survey beat expectations in all categories. Italian consumer confidence, manufacturing confidence, economic sentiment and industrial sales all beat expectations as lockdown restrictions eased.
Sweden The unemployment rate remained unchanged at 9.1% (8.8% exp., 9.1% prev.) and the Swedish prime minister lost a vote of confidence.
Japan
PMIs were mixed and only manufacturing was expansionary. The Tokyo core CPI beat expectations at 0.0% YoY (-0.1% exp., -0.1% prev.)
UK
House prices continued their strong trend higher. The CBI survey reported strong data on orders, sales and prices. PMIs were expansionary, but slightly lower than expected.
The Bank of England kept policy rates and its purchases programs unchanged. Only the Chief economist dissented, voting for a reduction in the purchases. Given the success of the UK’s vaccination program and the distance from market dysfunction as liquidity providers have adapted to work from home – requirements this view looks to be the lone voice of reason.
Australia
Retail sales missed, printing +0.1% MoM (0.4% exp., 1.1% prev.) and PMIs were expansionary, but slightly lower than the previous month. Melbourne implemented a lockdown.
New-Zealand
Consumer confidence ticked higher 107.1 (105.2 prev.) and credit card Spending was strong. Wellington announced a local lockdown.
