USA
The U.S. economic landscape during the last week displayed mixed signals. Inflation remained a central concern, with the Consumer Price Index (CPI) rising around 3.4% year-over-year, and core inflation staying elevated month-on-month at 0.3%, reinforcing the view that disinflation is proving stubborn. Meanwhile, initial jobless claims were relatively stable near 215,000, pointing to a resilient labor market that continues to support consumer spending, as evidenced by a solid 0.6% rise in retail sales. Despite this, the S&P Global Composite PMI came in at 52.4, reflecting modest expansion. Equities took a breather amid hawkish commentary from Federal Reserve officials, which pushed back expectations of rate cuts. The S&P 500 and NASDAQ fell 0.8% and 1.3%, respectively, while the Dow Jones slipped by 0.5%, with tech and rate-sensitive stocks leading the pullback.
Europe
In Europe, the economic picture remained clouded by sluggish growth and stagnant activity. The Eurozone's inflation rate stood at 2.4%, prompting the European Central Bank (ECB) to maintain its cautious stance, with minutes from recent meetings revealing internal divisions over the timing of potential rate adjustments. Germany’s Q1 GDP showed marginal growth of just 0.1%, underlining the fragility of recovery in the region’s largest economy. The Eurozone composite PMI hovered just above the contraction threshold at 50.1, hinting at economic stagnation, while UK jobless claims edged higher, raising concerns about labor market softness. In equity markets, investor sentiment weakened amid policy ambiguity and global uncertainties. The STOXX Europe 600 fell by 0.7%, the FTSE 100 by 0.9%, and the DAX 40 by 1.2%, while Spain’s IBEX 35 declined 0.5% and France’s CAC 40 shed 1.0%.
Japan
Japan's economic signals for the week painted a cautiously optimistic picture. The CPI rose 2.7% year-on-year, aligning with the Bank of Japan’s (BOJ) inflation target, giving policymakers some breathing room to maintain their ultra-loose monetary stance. Preliminary data for Q1 GDP indicated a modest 0.3% quarterly growth, driven by slight increases in household consumption. The Jibun Bank PMI improved to 50.7, marking a return to expansion in manufacturing and services. The yen’s weakness persisted, prompting concerns about import-driven inflation, yet benefitting export-led firms. With BOJ officials reiterating patience in adjusting policy, markets responded favorably. The Nikkei 225 gained 0.6%, and the TOPIX index advanced 0.4%, supported by cyclicals and exporters benefiting from the softer yen environment.
China
China showed signs of economic momentum but struggled with uneven sector performance. The first quarter GDP grew by 5.0% year-on-year, surpassing expectations and suggesting that stimulus efforts were beginning to bear fruit. However, the Caixin PMI dipped to 49.8, slipping into contraction territory and signaling ongoing weakness in the private sector, particularly in manufacturing. Meanwhile, industrial output rose 4.3%, helped by state-backed infrastructure and energy investments. In response to tepid private demand, the People’s Bank of China (PBoC) injected liquidity through medium-term lending operations to support credit flows. Tensions with the U.S. escalated over new chip export restrictions, dampening investor confidence. Despite the headwinds, equity markets saw modest gains; the Shanghai Composite rose 1.2%, while Hong Kong’s Hang Seng Index added 0.8%, reflecting a cautiously optimistic outlook fueled by central bank support and fiscal easing.