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Archinomics Weekly - Monday 17th May 2021

one year ago



US markets came off record highs as core inflation surprised on the upside. The Nasdaq was particularly hard hit. European markets also trended weaker. Japanese markets suffered a bout of volatility, on uncertainty over latest Covid-19 restrictions, while China’s CSI 300 index gained strongly on latest macroeconomic data.


US Treasury yields jumped midweek following the inflation data, before settling down later. In the Eurozone, both core and peripheral market government bond yields rose in sympathy, as did corporate bonds across the risk spectrum. Emerging market debt spreads tightened modestly last week, although returns were negative due to the rise in the US 10 year Treasury yield.


Sterling put in another strong performance across the board, while the dollar gained against the euro and the yen. The euro rose relative to the yen, which was weaker against all majors.


Oil had a volatile week on rising Middle East tensions. Iron ore prices hit record highs, as demand from China soared. Gold crept higher in response to rising inflation data.

Responsible investing

In a surprise nod towards responsible best practice, Elon Musk tweeted that Tesla will no longer accept bitcoin as payment, due to the digital currency’s negative environmental impact.


US headline CPI inflation jumped 4.2% in April, the biggest monthly increase since 1982, while retail sales data disappointed.

The European Commission forecast a faster than expected rebound for the Eurozone, with growth of 4.3% in 2021 accelerating to 4.4% in 2022.

Japan’s April producer price index rose 3.6%, led by an increase in prices for petroleum products, the biggest jump since 2008.

on the

FOMC minutes from the US Federal Reserve could lend clarity to recent statements that inflationary pressures should prove ‘transitory’.

GDP prints from Japan and the EU should indicate the strength of any rebound, while industrial production from China looks set to remain buoyant.

Listen to our weekly podcast for more information and our experts’ insights.


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