Global Markets Trade Flat Post Earning Season

The UK economy expanded by 0.1 per cent in the first quarter, avoiding a predicted recession. However, despite broad declines in the services sector, the gross domestic product surprisingly declined 0.3 per cent sequentially in March. 

For the first time in two years, the annual rise in consumer prices dropped to below 5 per cent in April, which can allow the Fed to take a break from rate hikes. While the bulk of the bear market may still be ahead of us, the economic downturn has already begun.  

With a 5.5 per cent increase during the period, core inflation—which includes volatile food and energy prices—met expectations. The Federal Reserve's preferred indicator, 'super-core' inflation, which is said to reflect services inflation minus housing prices and gained just 0.1 per cent for the month, however, was at its lowest level in over three years. 

However, in response to the statistics, Fed policymakers did not appear to lower their estimates for inflation and interest rates. John Williams, the president of the New York Fed, reiterated that he did not anticipate a rate cut later this year, in striking contrast to the three rate cuts that are built into futures markets by January 2024. 

The pan-European STOXX Europe 600 Index closed the past fortnight trade flat, with gains made earlier in the week disappearing as the market took in the prospect of future rate rises from the European Central Bank (ECB). The major stock indices showed a range of performances. Germany's DAX fell 0.30 per cent, while France's CAC 40 Index was down 0.24 per cent. The FTSE 100 Index for the UK fell by 0.31 per cent.

German industrial orders decreased more dramatically than anticipated in March, falling 10.7 per cent sequentially on a seasonally and calendar-adjusted basis, indicating that the country may be about to enter a recession. German industrial orders decreased more dramatically than anticipated in March, falling 10.7 per cent sequentially on a seasonally and calendaradjusted basis, indicating that the country may be about to enter a recession.

By a vote of 7-2, officials at the Bank of England (BoE) increased borrowing costs to their highest level since 2008 by a quarter point. Inflation is expected to decrease from its February prediction of 3.9 per cent to 5.1 per cent by year's end, according to the latest projections. Additionally, the BoE altered its estimate for economic growth, now expecting no growth rather than a 0.7 per cent decrease in the second quarter. 

According to official figures, the UK economy expanded by 0.1 per cent in the first quarter, avoiding a predicted recession. However, despite broad declines in the services sector, the gross domestic product surprisingly declined 0.3 per cent sequentially in March. 

The Nikkei 225 Index increased by 0.8 per cent and the larger TOPIX Index increased by 1.0 per cent throughout the week as signs of strength in corporate results buoyed the country's stock markets. The yield on the 10-year Japanese government bond decreased as a result, from 0.42 per cent at the end of the previous week to 0.39 per cent. 

Following the five-day Labour Day holiday, Chinese stocks fell in the past fortnight as investors grew sceptical about the sustainability of the nation's recovery. The blue chip CSI 300 dropped 1.97 per cent in local currency, while the Shanghai Stock Exchange Index lost 1.86 per cent. The benchmark Hang Seng Index fell 2.11 per cent in Hong Kong.