22/06/2015- Last week’s markets and economic data expected in the week ahead
Economic data released last week was broadly positive. In a week of limited data, the UK provided a number of positive points. Inflation returned to positive territory, with CPI rising to 0.1% in May due to a rebound in air fares and fuel prices. Another strong set of labour market data saw unemployment fall by 43,000 (to 1.81 million) over the February to April period, and average earnings rise by 2.7% year-on-year, the strongest growth rate since August 2011. Lastly, UK public sector borrowing fell by 18% year-on-year in May (to £10.13bn), boosted by a rise in income tax (up 5.3%) and VAT (up 5.6%) receipts. On the negative side, a German economic sentiment survey of analysts and institutional investors fell to a 7-month low in June, with uncertainty over Greece’s future to blame.
Stock markets posted a broadly negative week of performance. The FTSE 100 index fell by 1.10% over the course of the week; the S&P 500 index rose by 0.75%; the Dax index fell by 1.40%; whilst the Nikkei index fell by 1.02%. In sovereign bond markets, the UK 10-year Gilt yield is currently at 2.12%, the US 10-year Treasury yield is at 2.27% and the German 10-year Bund yield is at 0.75%.
Today’s emergency summit of Eurozone leaders is likely to be a key event this week, with time running out to secure an agreement between Greece and its creditors over its latest bailout funds. Economic data due for release this week is shown below.
Eurozone – Manufacturing PMI
Eurozone – Services PMI
Germany – IFO business climate survey
US – Q1 GDP growth (final est.)
Japan – Inflation
Japan – Unemployment