The latest macro data in the US revealed that the sharp decline in economic activity stopped and to some extent reversed in May: industrial production rose 1.4%, whilst retail sales climbed 17.7% relative to April. Despite the bounce in retail sales, it remains well below the pre-pandemic level. Although both figures look very promising at first sight, the Chair of the Federal Reserve called for caution claiming that ‘until the public is confident that the disease is contained, a full recovery is unlikely.’ According to Mr Powell, the US’ economy is entering a phase soon where increases in re-employment can begin. However, he remained very cautious with his remarks on the economic outlook by putting an emphasis on unusually high level of uncertainties, which can prolong the recovery.
During the week, PMI figures will be released in developed countries for June, which will help investors gauge the state of economies such as the US, the UK and the Euro Area. In emerging markets, many central banks will hold regular monetary policy meetings during the week (e.g. the Philippines, Mexico, etc.), where policymakers decide on interest rates and also release an updated assessment on their respective domestic economies.DOWNLOAD THE FULL ARTICLE View All Global Market Updates