The retail sales miss in May (-1.3% vs -0.8% MoM) prompted concerns about the waning impact of stimulus after an exceptionally strong March print (11.3% MoM). However real-time measures of consumer spending suggest moderate improvements as we head into the summer months.
A peak in supplier delivery times in May would suggest a short countdown to mean reversion, which on average takes ~10 months.
Bond investors are seemingly waiting for central banks to finally give in to tapering and/or economic data to roll-over. This waiting game has spread to any and all sovereign 10-year yields.
The ‘spring of nothingness’ has seen implied volatilities across all major financial assets fall back below long-run averages. All in all, covering markets has largely been a slog, while tracking the real economy has been gripping.
It’s been a slow week in cryptocurrency. Prices haven’t yet bounced back from their plunge a few weeks ago. Bitcoin and Ethereum oscillated throughout the week though neither has come close to its all-time high. Nevertheless, the spotlight continues to shine on crypto.
The Reserve Bank of New Zealand is the latest central bank to announce an end to loose monetary policy in the light of economic recovery. Their handling of the coronavirus pandemic may be to credit for the brevity of their recovery period, but will its neighbor, Australia, now be inclined to take similar action?