May 3 - Following are five big themes likely to dominate thinking of investors and traders in the coming week and the Reuters stories related to them.
Unsurprisingly, some market watchers advise caution. As Volmageddon showed, vol can spike spectacularly in a quiet market, sometimes driven by just one unexpected data point. After all, if the old adage holds, some people may be looking to sell in May and go away.Data: more important than usual these days as markets try to decide whether the green shoots cropping up in some places are the real deal.
For sure, one week of brighter data isn’t enough to shift entrenched pessimism. So while Citi’s economic surprise indexes for Europe and United States have started ticking higher, they remain in negative territory. Nor have brighter growth numbers managed to lift German 10-year bond yields much above zero percent yet. But keep watching that data.3/“TRANSITORY” WEAKNESS?
So is Powell right in his view of inflation? Some recent indicators, from first-quarter growth to factory orders to productivity, have been pretty strong. The flip side is manufacturing is growing more slowly and inventories are building. So we’ll need to see whether consumer and producer inflation figures due May 9 and 10 confirm the inflation backdrop is indeed transient.
Lowe has the added complication of a federal election in May. Orr will be dealing with a new monetary policy committee that now includes external members.
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