Coffee Break

Coffee Break:
  • Week

Last Week in a Nutshell

  • The annual inflation rate in the euro zone came out at +7.4% in March (vs 5.9% in February). The war in Ukraine and sanctions on Russia pushed fuel and natural gas prices to record levels.
  • Federal Reserve Chairman Jerome Powell confirmed the central bank is ready to raise rates expeditiously.
  • The US and the German 10-year Treasury yields spiked recently amid concerns around inflation, more aggressive stance by major central banks on future interest rate increases, and their potential to weigh on economic growth.
  • China’s Q1 GDP grew by 1.3% q/q and 4.8% y/y but risk to the outlook rose sharply, leading the People’s Bank of China to cut the required reserve ratio by 25 bps. Balancing the economic growth while containing the current COVID-19 outbreaks has remained a challenge.

What's Next?

  • Having won France’s hotly contested presidential race, Emmanuel Macron will govern the 7th world’s economy for a second 5-year mandate. Legislative elections will take place in June.
  • The euro zone and the US will publish flash Q1 GDP growth rate shedding some light on how global growth has been faring so far. The IMF already cut global growth forecast and anticipate a fragmentation of the world economy into rival blocs.
  • Germany will release readings of the IFO business climate, current conditions and expectations whereas the country is moving as fast as possible to end its dependence on Russian energy.
  • Central banks will remain in focus even if the Fed will be in a blackout period ahead of the May 4th meeting. The Bank of Japan will meet and is expected to address the recent Yen weakness driven by its persistently more dovish stance.

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