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Link to full report and disclosures: Real-Time Insights, Economic and Financial Pulse
Real-Time Insights | |||||||
Highlights |
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· Retail diesel and gasoline prices soared to fresh highs, rising to $5.6 and $4.5 per gallon, respectively. These increases will likely boost headline inflation on a m/m basis in May, with rising diesel costs likely to impact freight and shipping costs with a lag. | |||||||
· While the seven-day moving average of daily COVID-19 cases has declined to 7,400 and Chinese authorities have indicated a phased reopening of Shanghai is imminent, the effects of lockdowns are now showing up in the economic data. Retail sales plunged 11.1% yr/yr in April, while industrial production declined 3%. | |||||||
· Wheat prices jumped ~5% on Monday following India's announcement that it would restrict wheat exports, exacerbating food security issues across emerging markets. Global wheat production for export has been severely curtailed by Russia's invasion of Ukraine, with Ukraine accounting for 10% of global wheat exports in 2021. | |||||||
· Lumber futures slumped $80 to $920 per 1,000 board ft., but remain well above pre-pandemic levels. Amid robust demand home builders have passed on increased construction costs to home buyers, but against the backdrop of rising rates, that flexibility is likely to be tested. | |||||||
· Spot container rates from China to the U.S. extended their declines, with spot shipping rates from China to the west coast down 11% ytd compared to a 3.8% decline for routes from China to the east coast. The recent slowdown in Chinese manufacturing production could weigh on spot rates in the near term. | |||||||
· The number of U.S. job postings on Indeed continues to moderate from its January peak, leveling out at 55.7% above its pre-pandemic level, diverging somewhat from the upward trend in official job opening data for the same period. An easing in job openings consistent with Indeed's data without a broader deterioration in labor market conditions would be welcomed by the Fed as a sign of easing labor market tightness. | |||||||
Week ahead: Retail Sales, Industrial Production (Mar 17); Housing Starts, Building Permits, MBA Mortgage Applications (Mar 18); Existing Home Sales (Mar 19) |
Link to full report and disclosures: Real-Time Insights, Economic and Financial Pulse
Mickey Levy, mickey.levy@berenberg-us.com
Mahmoud Abu Ghzalah, mahmoud.abughzalah@berenberg-us.com
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