- Macron loses his majority in Parliament, with the left-wing grouping of Mélenchon coming second and Le Pen’s National Rally able to become a parliamentary grouping for the first time since 1986.
- China leaves Prime Rates unchanged.
- Tsy Sec Yellen: “I expect the economy to slow… but I don’t think a recession is at all inevitable”.
- Fed Waller: “If the data comes in as I expect, I will support a similar-sized move at our July meeting… The Fed is ‘all in’ on re-establishing price stability”.
- Moeller-Maersk boss warns the ‘bullwhip’ effect could kick in from August, but that “We don’t see our customers moving production back to Europe. They’re spreading it around in Asia”.
- European head of Private Equity at KKR says “this is a time of reckoning for our industry”.
- Apple shop in Maryland votes to become the first unionised store in the US.
- 46% want BOJ to end loose monetary policy against 36% who want it to continue, according to Nikkei survey, as 64% say they cannot tolerate inflation.
- Eurozone doesn’t face another sovereign debt crisis, says Eurogroup chief.
- Number of UK property company insolvencies at decade high.
The S&P500 had its worst week since March 2020 last week. Asian markets were mixed overnight with S Korea down but China up after loan rates were left unchanged. Bitcoin breaches $20,000 over the weekend. Today brings a speech from one of the BOE’s hawkish dissenters, Catherine Mann, who might touch on GBP weakness as the title of her speech is “Monetary Policy in the Global Context”; while Lagarde appears before politicians at the European Parliament in both her role as ECB Governor but also separately as Chair of the European Systemic Risk Board.
1. The Fed
Powell got tough with the markets last week but this week he faces his toughest audience – Congress. With the mid-term elections less than six months away, the politicians will be challenging him over how the economy can hope to avoid a hard landing now that interest rates are climbing at the same time as inflation. This is why the third sentence of Powell’s opening statement was “We at the Fed understand the hardship high inflation is causing”. Expect more of this when he is interrogated by the Senate on Wednesday and . . .
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On this day in 1975, Jaws opened in US movie theatres.