Optimistic Sentiment Seen on Tuesday
17 May 2022
Financial markets managed to remain in a positive mood, evident by rising stocks and falling US dollar during the London session on Tuesday.
“Risk assets are desperately seeking some stabilization after seven consecutive weeks of losses in U.S. equities and exacerbating market concerns over the combination of a global economic slowdown and monetary tightening,” said analysts at ING, in a note.
Weak retail sales and industrial output numbers in China were released on Monday, adding to indications of the global recession, while the New York Fed's Empire State manufacturing index dropped sharply in May.
More data ahead
Later in the afternoon, the second estimate of Eurozone GDP for the first quarter is projected to reveal a moderate 0.2% quarter-on-quarter growth, up 5.0% year-on-year.
The economic calendar during the US session will contain retail sales numbers on Tuesday. Market players anticipate an improvement month-on-month, likely strengthening the USD further. Industrial production and capacity utilization figures are also on the agenda.
Last but not least, Federal Reserve Chair Jerome Powell is due to speak about inflation at Wall Street Journal's Future of Everything Festival in New York.
Shanghai said on Tuesday that there had been no coronavirus infections in any of the city's districts. Nonetheless, officials intend to gradually ease restrictions beginning May 21, with the goal of lifting the lockdown fully by June 1.
In other news, Francois Villeroy de Galhau, a member of the European Central Bank's (ECB) Governing Council, stated on Monday that a weak euro would go against the ECB's price stability goal. One needs to ask, why is the euro too weak?