Key Points:
- Chinese GDP rises 4.8% y/y but the short term economic prospects look to be less rosy as omicron severely affects their outlook
- The ECB left rates unchanged late last week and plans to exit their massive stimulus plans in the coming months. Markets are now pricing in a 0.25% hike in the September-December meeting which would bring the deposit rate back to zero
- Lagarde says the war between Ukraine and Russia is stoking risks to upside inflation expectations in the Eurozone
- Canadian CPI m/m published at 1.4% in March raising the year on year rate to 6.7% the highest since January 1991 band coming in well above the anticipated 6.1%
- US House shows more evidence of slowdown with March figures releasing at 5.77m down 2.7% seasonally adjusted. The 30 year fixed rate loan rate has jumped recently from 3.3% at the start of 2022 to 5.2%. Cash rate increases are expected at the May, June and July Fed meetings to peak at 3% in early 2023 before rate cuts kick off again by the end of the same year
- Russian troops have claimed victory as they take Mariupol, around 120,000 civilians remain stranded in the city
- USA is providing an additional 800M worth of military aid to Ukraine, meanwhile China refuses to criticise Russia’s invasion of Ukraine