Major Economic Data from US and Eurozone Released Last Week, Market Concerns over US Falling into Recession Linger

SHANGHAI, Apr 24 (SMM) – A barrage of economic data has confirmed that the US economy is gradually cooling down. But in the medium and long-term run, the US core inflation rate will remain at a relatively high level, indicating that monetary policy has worked but with a time lag.

The market still has concerns about the US falling into an economic recession.  The Federal Reserve remained hawkish last week, arguing that bank liquidity risks are overestimated and that the US economy will not experience a recession in the second half of the year.

Although the economy continued to cool down and inflation continued to slow down, it was not as fast as the market expected. The first Beige Book released by the Federal Reserve after the banking crisis confirmed that the economic cooling was still below market expectations. This pushed the probability of a US dollar rate hike of 25 basis points in May to soar to 88%. The US dollar rose, pressuring copper prices.

It is worth noting that the weekly employment data and real estate data in the United States continued to confirm that the US economy is gradually cooling down, indicating that monetary policy has worked but with a time lag, so the market still had concerns about an economic recession.

In the eurozone, the CPI in the UK rose by 10.1% year-on-year in March, exceeding 10% for seven consecutive months. This, coupled with the strong wage growth of British workers announced during the week, fuelled market concerns about the high inflation in the UK. After the release of the data, the exchange rate of the GBP against the US dollar rose, and the US dollar index fell in response, helping copper prices to rise.