The Day Today 24th May 2022

  • ECB’s Villeroy de Galhau says “Frankly, if you look at President’s Lagarde’s statement [yesterday] morning, the deal is probably done because there is a growing consensus” and “I would play down the idea of a short-term trade off between inflation and growth. In the short run, our priority is clearly … fighting inflation”
  • Fed Bostic on rate hikes: “I think a pause in September might make sense”.
  • Kissinger at Davos says “Taiwan cannot be the core of the negotiations because it is between China and the United States”.
  • Airbnb to close its domestic business in China, sources say.
  • Snap CEO warned employees that the company will miss revenue and earnings targets in the current quarter as the “macro environment has deteriorated”, Snap shares fell 30%.
  • Zoom earnings beat expectations.
  • Fed’s Esther George sees 2% rates by August with further rate rises beyond this guided by if and how much inflation rises cool.
  • UK Chancellor considers windfall tax on electricity producers as well as North Sea oil & gas.

The S&P 500 closed up 1.9% with gains in every sector. Asian equity markets fell on Tuesday. Today brings the UK PSNBR, PMIs and Fed’s Powell and maybe even the full Sue Gray report…

The Week That Will Be
Sue Gray, finally the report will come out, Boris might think he has been exonerated but the buck stops with him. Some MPs were waiting for this report before acting (we have detailed analysis of Conservative MPs). Parliament goes into recess Thursday but the drip of bad news will continue; Fed Minutes, Wednesday, hawkish, job losses will result, Whatever It Takes Is Dead, now it’s Whatever It Takes to Bring Down Inflation Expectations; ECB, doves last stand this week with Panetta and Lane on Wednesday; Australia, voters chose None Of The Above in reality; Davos, Scholz has the closing speech on Thursday where he will try to regain the initiative; Volatility, there will be lots more of it as war, plague and famine hit just when monetary stimulus is turned off.

BM Talks: David Smith, Economics Editor of The Sunday Times, Speaks
We ask David whether the UK will go into a recession this year, who his favourite Chancellor is, and what’s happened to the reporting of business news in the era of social media. Listen here or subscribe to our podcast which is now available on SpotifyGoogleApple etc.

On this day in 1941 the German battleship Bismarck sank the then pride of the Royal Navy, HMS Hood, leading Prime Minister Winston Churchill to give a simple but direct order, “Sink the Bismarck”. Three days later, they did exactly that.

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