Monday's Markets Update (May 8, 2023)

08 May 2023 by rate3

On Monday, the NY FED reported that short-term inflation expectations had declined to 4.4 percent, while long-term expectations had risen slightly. The stock market was mixed due to the absence of news, with NASDAQ (open: 12231, close: 12256) trailing. Additionally, BTC (open: 27766, close: 27340) corrected downwards by 1.5 percent on technical factors, compounded by news about exchanges buckling under regulatory pressure (Bittrex).

As per the NY FED April Survey, consumers' inflation expectations for the one-year-ahead horizon fell to 4.4 percent, while for the three- and five-year-ahead horizons, they rose slightly to 2.9 percent and 2.6 percent, respectively. Moreover, the mean probability that the US unemployment rate will be higher one year from now increased by 1.1 percentage points to 41.8%.

Other Markets Notable Monday's Updates:

China: Country's exports rose unexpectedly by 14.8% YoY to a high of USD 315.59B in March 2023, rebounding sharply from a 6.8% drop in January-February combined and beating market consensus of a 7% fall. It was the first advance in shipments since September 2022 as Beijing boosts trade with developed countries and emerging economies. Steel products (53.2%) and refined products (35.1%) were the largest contributors. Exports to China's largest partner, ASEAN, rose 35.43%, while those to the EU (3.38%) and Russia (136.43%) also increased. Conversely, exports fell to Japan (-4.8%), Taiwan (-27.6%), and the US (-7.68%), while they expanded to Australia (23.7%) and South Korea (11.3%).

Australia: In April 2023, the Westpac-Melbourne Institute Consumer Sentiment Index for Australia jumped 9.4% MoM to reach 85.8, its highest since June 2022, following a month of being near a 30-year low. The RBA's pause on rate hikes bolstered the upturn, with the gauge for economic conditions in the next 12 months surging 16.5% to 85.4.

Brazil: Auto manufacturing in Brazil decreased in April 2023, with production dropping 19.4% month-over-month to 178,853 units, the lowest level for that month since 2020, below market projections of a 0.2% decline. Production fell across the board for trucks (-41.1%), light vehicles (-18.1%), and buses (-16.9%). On a yearly basis, vehicle production decreased by 3.9% when compared to the same period in 2022.