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United States: Economic Data More Rice & Beans than Steak & Eggs

  • Markets chewed on an array of economic data this week, and what was served was mostly gristle. A weak retail sales print suggests that consumers may finally be feeling some spending fatigue. Markets also received a three-course housing market update which painted the picture of a sector that remains rocked by higher interest rates. Much of the week’s disappointing data were concentrated in interest-rate sensitive sectors, and the wider economy remains healthy on balance even as softening becomes increasingly evident.
  • Next week: New Home Sales (Wed.), Durable Goods Orders (Thu.), Personal Income & Spending (Fri.)

International: Global Central Bank Decisions Galore

  • It was a busy week for global central banks. The Reserve Bank of Australia (RBA) held its policy rate at 4.35% and offered hawkish commentary; we have pushed out our forecast for an initial RBA rate cut to February 2025. The Bank of England held rates steady and communicated a more dovish-leaning tone, affirming our outlook for an August rate cut. The Swiss National Bank cut its policy rate by 25 bps, Norway’s central bank delivered a hawkish hold, while in emerging markets the Chilean Central Bank opted for a 25 bps rate cut while Brazil’s central bank held steady.
  • Next week: Canada Inflation (Tue.), Riksbank Policy Rate (Thu.), Banxico Policy Rate (Thu.)

Credit Market Insights: Households Feeling Greater Squeeze

  • Earlier this month, the New York Fed released May data for its Survey of Consumer Expectations (SCE). While perceptions of financial well-being improved, gauges of credit standards and availability saw no improvement over the month.

Topic of the Week: CBO Budget Projections Reaffirm Challenged Fiscal Outlook

  • The Congressional Budget Office released an update to its 10-year budget projections this week, reaffirming an already challenged fiscal outlook. CBO boosted its fiscal year 2024 U.S. budget deficit estimate to $1.9 trillion, up from $1.5 trillion in previous projections from February.

Full report here.

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