In-case-you-missed-it Monday: the real stories that mattered in the financial papers this week.
What’s going on America?
All eyes in the market were on America this week, with a couple of troubling data prints.
First up, inflation freaked everybody out by coming in much hotter than expected. A few months ago, markets were expecting three rate cuts this year. Now they think we’ll be lucky to get one.
Core inflation (excluding food and energy) now sees America as an outlier. However, where America goes, the rest of the world tends to follow, so this is a worry.
And when you compare services inflation, the US and Australian measures move closely together. The lift in America will be giving the RBA a lot of pause for thought.
Not only did the inflation data come in hotter than expected, so did the jobs numbers, with solid gains posted in March. This is not consistent with a nicely cooling economy.
However, there has been a pivot to part time employment, which suggests that softness might just be coming through with a lag.
A lot of wannabe property investors
In Australia, Google searches for “investment property” have picked up substantially, pointing to strengthening underlying demand.
Opioid deaths rising
Finally, opioid overdose deaths in America are going exponential. This points to broken communities, and these forgotten communities were one of the forces driving the Trump election in 2016. It will be interesting to see how it plays out this time.
And that’s (pretty much) everything worth knowing in markets this week.
JG.
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