Market Action

• While equity markets in the U.S. pulled out small gains fixed income movements dominated discussion during this past week. Considerable moves in longer term bonds in the U.S. and Europe captured attention with benchmark rates hitting their highs for the year. Among stocks, consumer staples led thanks to the dollar’s continued decline.
• Oil prices rose for the ninth consecutive week. The streak is the first of its kind according to Thompson Reuters. A report from the Financial Times published highlighted explicit statements from Saudi Arabia articulating a desire to keep swing production down and hold market dominance.
• China lowered interest rates once again over the weekend to combat falling prices. Despite frequent monetary movements monetary conditions remain tighter than policy makers desire thanks to deflationary pressure. Chinese data continued to come in weak over the past few days.
• European GDP rose for the first quarter higher than expected, including in weak economies such as Italy. Germany’s growth was lackluster, missing estimates.
• Weak Producer Prices and Retail sales numbers contributed to the string of poor economic data in the U.S. With poor fundamentals in April and the large GDP miss for Q1 Federal Funds futures are pricing the first rate increase for January 2016.
• Wholesale pricing data came in weak for India this week. Some analysts speculate that the rupee could come under pressure with the combination of low inflation and rising rates in the U.S.
• Greece made its payment due to the IMF this past Tuesday in large part by utilizing its reserve account held at the fund. Talks between Greece and creditors resume in the hopes of a deal before larger payments are due in June and July.

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