Mexico The Mexican Peso (MXN) enjoyed another strong week against USD drooping as low as 17.53 on Thursday to end the week on on 17.58. US and Mexican border agencies were working together throughout the week to avoid chaos as Title 42 – the USA`s COVID-19 restirictions to block asylum seekers – came to an end of Thursday. It is thought that Title 42 will be replaced with even tougher rules.
US US markets were beginning to look like closing out a positive by Thursday´s close with technology stocks leading the charge, but a bumpy end to the week soon changed the landscape.
Consumer Sentiment data from the University of Michigan showed a notable increase in consumer inflation expectations for the coming months. The state of the US economy and in particular fears of a debt ceiling standoff at the US government continue to weigh on American consumers minds.
US regional banks also continue to be a cause for concerns with embattled WestPac bank giving up over 23% of its market cap on Thursday after it was revealed that it had lost 9.5% of total deposits last week amid uncertainly over the banks future solvency. The message from many analysts continues to be that the worst of the current US banking crisis is over; time will tell.
In more encouraging news, US inflation fell below 5% for the first time in more than 2 years as official statistics showed that prices have risen by just 4.9% in the 12 months to April 2023.
Europe European inflation continues to prove a sticking point for policy makers as Eurostat (the European Unions statistics agency) reported that for the 12 months to April European inflation jumped to 7% from 6.9% the month previous. It is widely expected that the European Central Bank (ECB) will continue to push ahead with rate rises in the coming months.
According to the Office of National Statistic (ONS) UK economy grew by just 0.1% in the first quarter of 2023 and still lags behind pre-pandemic levels by 0.5%. The ONS stated that strikes, cost of living and unseasonable wet weather had taken its toll while the Bank of England said it was more optimistic that the UK would avoid recession this year.
Asia
Following the global trend Asian markets also had a tough week fueled by fears of US recession but promising US inflation figures failed to delight traders with Chinas SSE Composite index and Hong Kong’s Hang Seng closing down 1.86% and 2.11% respectively.
Japans task of mounting a post-COVID revival seem to be getting more difficult as consumer spending unexpected fell in March and wages marked their twelfth month of declines. Earlier in the week the government announced that for 2022 its current account suplus fell 54% from the previous year.
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