Mixed Indicators Dominate the Global Economy: Recent data shows a slowdown in Chinese retail sales and improved industrial production.
Inflation in the Eurozone remained stable, supporting expectations of a potential rate cut.
In contrast, U.S. bond yields surged following a credit rating downgrade, reflecting mounting concerns over national debt.

Contents

Retail Sales in China

Inflation in the Eurozone

U.S. Bond Yields

Chinese Retail Sales Slowdown

Official data released by China’s National Bureau of Statistics on Monday morning
showed that retail sales rose by 5.1% year-over-year in April, lower than analysts’ expectations of a 6.0% increase.
However, this reading marks a slight improvement compared to March, which posted 5.9% growth.

In contrast, industrial production grew by 6.1% in April, surpassing forecasts of a 5.7% increase,
though still below February’s 7.7% growth rate.

On the labor front, the unemployment rate in China rose to 5.1% during the same period,
which was better than expected. It remained unchanged at 5.2%, the same level recorded in February.

Eurozone Inflation Stability Strengthens Outlook for ECB Rate Cuts

Data from Eurostat released on Monday showed stable inflation levels in the Eurozone for April, aligning with market expectations.
This signals that price trends are continuing at moderate levels,
giving the European Central Bank more flexibility in its upcoming monetary decisions.

According to the data, annual headline inflation stood at 2.7% in April,
the same as in March and in line with analysts’ forecasts. This reflects relative price stability in goods and services.

Core inflation, which excludes volatile components such as energy, food, alcohol,
and tobacco, also held steady at 2.2% year-over-year for the second consecutive month.
This supports the view that underlying inflationary pressures are losing momentum.

These figures support expectations that the ECB could lower interest rates in the year’s second half,
especially if inflation data continues to trend sideways, coinciding with a relative slowdown in economic growth across the bloc.

U.S. Bond Yields Rise Following Moody’s Credit Rating Downgrade

U.S. Treasury yields increased noticeably on Monday as markets focused on the country’s growing public debt
after Moody’s downgraded its credit rating late last week.

The yield on two-year bonds, which are most sensitive to monetary policy changes,
rose by 2.1 basis points to 4.004%. Ten-year yields climbed by 10.5 basis points to 4.544%,
while 30-year bond yields jumped 12.6 basis points to 5.023%, marking their highest level since November 2023.

Moody’s downgraded the U.S. credit rating by one notch,
citing concerns over rising debt levels and financial pressures from high interest rates.
The move has sparked investor worries over an expanding
budget deficit amid congressional discussions on new, unfunded tax cuts.

Mixed Indicators Dominate the Global Economy

Mixed Indicators Dominate the Global Economy

Related Topics