Because of strong inflation: a 3% drop in UK retail sales

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09:01

UK Macro: Retail sales in the UK rose by 0.5% in April, a tenth of a percentage point higher than early market expectations. On an annual basis, the strong inflation in the Kingdom nevertheless led to a sharp decline in consumption, with retail sales falling by 3% in the past year (when forecasts were for a 2.8% decline). Sales of core products jumped in April by 0.8%, more than double the forecasts (0.3%), and the decrease compared to April last year was moderate than the forecasts (2.6% – compared to the expected decrease of 2.8%).

In April, it was announced this week, inflation in the United Kingdom stood at an annual rate of 8.7% – a significant decrease compared to the measurement of 10.1% in March (and the first time since September that a reading of less than 10% was recorded), but this is still a figure that was higher than the forecasts, which predicted that a rate Inflation in the Kingdom will moderate to 8.3%.

07:30

Trading in Asian stock markets is running in a mixed trend this morning. The Nikkei index in Tokyo climbs by about 0.6% and the Taiwanese flagship index jumps by 1.2%, while in Shanghai and Shenzhen declines of 0.1% to 0.4% are recorded. In Hong Kong there is no trading today on the occasion of Buddha’s birthday.

In the macro sector, this morning the inflation data for the Japanese capital Tokyo was published. The consumer price index rose by 3.2% in May – according to preliminary data – compared to an expected increase of 3.9%. The core index also rose by 3.2%, when forecasts were for a 3.3% increase. The price index for services in the major companies rose above what the economists expected, at an annual rate of 1.6%, when the market predicted an increase of 1.4%.

On Wall Street at this time there are decreases of 0.1%-0.2% in futures trading, after a sleepy evening in the value stocks sector (when the Dow Jones ended with a slight decline) against strong increases in the growth stocks – and especially in the chip giants Nvidia which also attracted you AMD , Taiwan Semiconductor (TSMC) and the technology giants. The Nasdaq rose by 1.7% thanks to the gains of the high-tech sector shares.

In the commodities trading arena, price stability of the types of crude oil is recorded. American oil traded around $71.8 per barrel and Brent oil for $76 per barrel. Gold rises by about 0.4%, and an ounce of the precious metal is sold at a price of $1,947.

As for foreign exchange and crypto – the dollar is stable around the shekel and its rate is 3.72 shekels, the euro is also unchanged and its rate is still at 4 shekels, similar to yesterday’s trading. Compared to the index of the main currencies in the world, the dollar actually weakened by about 0.2%. There are slight increases in crypto, but bitcoin is still at a relatively low level of 26.4 thousand dollars.

At 9:00 (Israel time) retail sales data will be published in Great Britain, with the expectation being a monthly increase of 0.4% in April and a sharp decrease of 2.8% compared to April last year – partly due to the high inflation in the Kingdom.

At 15:30 (Israel time) the data on private consumption expenditures for the month of April (the Core PCE index), the preferred index of the Federal Reserve for estimating inflation, will be published in the US. The expectation is for a monthly increase of 0.3%, so that the annual increase rate will amount to -4.6% – no change compared to March.