Friday promises to be a busy day from a macroeconomic point of view. The main event will be May inflation in the United States, which will be revealed at 2:30 p.m. These figures come as rising prices continue to alert economic leaders around the world. Recently, Janet Yellen, former chairman of the US Federal Reserve and current Treasury Secretary, said that inflation pressures remained enormous and that they should continue. What worry Wall Street because inflation is often synonymous with purchasing power and corporate margins at half mast. The pace should also accelerate over a month, the Bloomberg consensus estimating the increase at 0.7% of consumer price index, against 0.3% in April. Year-on-year inflation in May is however expected to slow slightly to 8.2%, down from 8.3% last month.
Inflationary risks could also weigh on the US consumer confidence index from the University of Michigan unveiled at 4 p.m., still expected to fall to 58.2, against 58.4 the previous month. Bad news if it is confirmed, because household confidence depends on their consumption and therefore the health of the economy.
Inflation in China should remain contained
In Asia, the level of inflation will be known overnight, particularly in China. The increase in prices is however less strong than in Europe and North America, the confinements having slowed down demand from Chinese households and therefore the pressure on prices. Consequently, consumer price index should rise very slightly on an annual basis to 2.2% in May, against 2.1% the month before. In addition, after the easing of health restrictions in Shanghai, activity will pick up again but will take time to regain full capacity. Thereby, producer price index, often a leading indicator of inflation, could slow to 6.4% YoY from 8% last month (Bloomberg consensus). In Japan, the other country less affected by inflation, this index is expected to slow to 0.6% over one month, while it was 1.1% in April.
In addition to prices, operators will be sensitive to the april current account balance published by Germany. It should fall to 18.8 billion euros, against 21.1 billion the previous month. Among the factors of this decrease, experts from CPR Asset Management pointed out that exports to China were proving increasingly difficult, especially for the automotive sector which is very important within the German economy.
On the French securities side, Groupe Crit and Metabolic Explorer will hold their general meetings in the Paris region.