Wednesday's Markets Update (May 10, 2023)

14 May 2023 by rate3

On Wednesday, BOL reported that both inflation and core inflation rates had fallen, which was in line with market expectations. Accordingly, NASDAQ (o:12286, c:12306, +0.2 percent) remained flat while BTC (o: 28175, c:27692, -1.7 percent) continued its technical downward correction.

Details: The yearly inflation rate decreased to 4.9% in April 2023, the lowest since April 2021, and lower than the market's expectations of 5%. The price of food increased at a slower rate (7.7% compared to 8.5% in March), while energy costs declined even further (-5.1% compared to -6.4%), including the price of gasoline (-12.2%) and fuel oil (-20.2%). Shelter expenses, which make up more than 30% of the total CPI basket, slowed for the first time in two years (8.1% compared to 8.2%), and the cost of used cars and trucks decreased once again (-6.6% compared to -11.6%). The CPI increased by 0.4% from the previous month, with shelter costs being the primary contributor to the monthly all-items increase, followed by used cars and trucks and gasoline.

In April 2023, the yearly core inflation rate for consumer prices, which disregards unstable items like food and energy, fell as expected to 5.5%, down from 5.6% in the previous month, due to a decrease in rental costs. Month-on-month, core consumer prices increased by 0.4% in April, which matched March's rate and was in line with what analysts predicted.

World's Notable Macroeconomic Updates:

China: In April of 2023, China's inflation rate declined to 0.1% from the previous month's 0.7%, which was lower than anticipated. The decrease in prices for both food and non-food items was due to an unstable economic recovery after the enclosure policy was lifted. Food prices fell notably due to lower prices of pork and fresh vegetables, while non-food prices fell due to lower prices for transportation and housing. Inflation for health remained steady, while education costs increased.

Note, however, that all publicly available statistical information about the Chinese economy is rigorously censored, which leads many analysts to question its validity.