Fixed Income Update 16 May 2024
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 16 May 2024
The Reversal of The Dovish Stance, Albeit Limited
The increase in weekly initial jobless claims is anticipated by market participants as it helps mitigate the risk of inflation in the services sector. The inflation risk stemming from the increase in commodity prices remains relatively limited, as evidenced by the slight rise in WTI prices to USD78.64 per barrel on average last week (Prev: USD78.58 per barrel). Producer costs indicate that the headline PPI for Apr ‘24 in the US experienced an increase to 0.5% MoM (Cons: 0.3% MoM, Prev: -0.1%). The same trend is observed in the Core PPI for the same month, which rose to 0.5% MoM (Cons: 0.2% MoM, Prev: -0.1% MoM). The largest increase was driven by a 0.6% MoM rise in prices for services.
Data from the US, such as initial jobless claims, US existing home sales, and Powell's remarks, will continue to be a focus for the markets. Additionally, data on Japan's GDP, industrial production in China, and EU CPI will be closely watched. Meanwhile, the anticipation surrounding the Bi Rate will be a focal point for domestic market participants.
Regards,
KBVS Research Team