The weekend’s chaotic events in Pennsylvania at a Donald Trump campaign rally overshadowed an otherwise busy week of macroeconomic data and political news. The assassination attempt also followed a broadly positive week for equity markets.
The latest Consumer Price Index data was mixed, the headline US inflation rate declining 10 basis points to 3% in June, albeit rising 0.1% after stripping out food and energy to 3.3%. Core services inflation ex housing, the so-called super-core measure, fell for the second month in a row. The shelter component which had been one of the stickiest contributors to higher inflation saw the lowest rise since January 2021. The S&P 500 index rose 0.87% during the week in local currency, whilst the rate-sensitive Russell 2000 rallied some 6.0%. Bonds also rallied on the data as markets fully priced in an interest rate cut for the September policy meeting followed by a second in December.
Pressure intensified throughout the week on President Biden as an increasing number of fellow Democrats encouraged him to step aside as his party’s presidential nominee, more than two weeks after his poor debate performance against former President Trump. Several Democratic members of the House of Representatives joined those already calling on the president to end his campaign, bringing the total to 17 so far, though Peter Welch is the only sitting Senator to publicly call for Biden to step aside.
Equities saw gains in Europe; the UK’s FTSE 100 up 0.6% for the week, whilst the MSCI Europe ex UK index closed 1.45% higher. France faces gridlock as the left-wing and centrist political blocs strategy to deny the right-wing National Rally a parliamentary majority put Marine Le Pen’s group into third place in Sunday’s final round of voting. The left-wing New Popular Front took the largest number of seats. Incumbent President Macron’s Ensemble party came in second, however the formation of a government could take some considerable time.
Week Ahead
| Day | Country | Measure | Period | Forecast | Previous |
| Monday | China | GDP q/y | Q2 | 5.10% | 5.30% |
| China | Industrial Production y/y | June | 4.90% | 5.60% | |
| China | Retail Sales y/y | June | 3.30% | 3.70% | |
| Europe | Industrial Production m/m | May | -1.00% | 0.00% | |
| Tuesday | US | Retail Sales m/m | June | 0.00% | 0.10% |
| Wednesday | UK | CPI y/y | June | 2.00% | 2.00% |
| UK | Core CPI y/y | June | 3.40% | 3.50% | |
| UK | PPI y/y | June | 0.10% | -0.10% | |
| Europe | Core CPI y/y | June | 2.90% | 2.90% | |
| US | Housing Starts m/m | June | 1.31m | 1.28m | |
| US | Industrial Production m/m | June | 0.30% | 0.90% | |
| Thursday | US | Unemployment Rate 3m | May | 4.40% | 4.40% |
| UK | Average Earnings inc Bonus 3m/y | May | 5.70% | 5.90% | |
| Europe | ECB Refinancing rate | June | 4.25% | 4.25% | |
| Japan | CPI y/y | June | 2.90% | 2.80% | |
| Friday | UK | Retail Sales m/m | June | -0.40% | 2.90% |
Source: Refinitiv Workspace, 15/07/24
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