US economy contracts but Trump blames Biden

Good morning

Welcome to May.  We’re already one third of the way through the year and I feel it has come and gone very quickly.  Not everyone agrees but for me seems to be just flying by.  I must be having fun!

US and EU stocks ended a touch higher having been in negative territory for much of the day, as US Q1 GDP fell to -0.3%, the first contraction in the US economy since 2022.   Trump won’t be happy it comes on his watch although he’s already blamed Biden and whatever he did or didn’t do during his tenure.   

We’ve seen a stronger US dollar through yesterday and again this morning, GBPUSD currently down at 1.3275 and EURUSD is at 1.1290.  USDJPY has traded higher partly down to the stronger USD but also a dovish BoJ meeting, where they kept rates unchanged but lowered growth and inflation forecasts and warning of further risks to both.  USDJPY has traded from below 143.00 up to 144.75.  GBPJPY just around 192.00.    

On US trade talks, there are reports that EU ar preparing to present proposals to the US next week.  China says US has reached out to them while Greer, the US Trace Rep has said no official talks are under way, both statements seem to undermine Trump’s suggestions last week that China have been in touch.  Trump has said there are potential deals with Japan, India and South Korea.

US have finally signed an agreement with Ukraine over access to natural resources.  Therer is some hope that this could ensure US remain at the negotiating table for peace although I fear Trump will now pressure Zelensky to give up all sorts of territory in order to allow the US to ransack, err I mean develop, Ukraine’s resources.  Still, I’d hope it acts as something of a deterrent to Putin.

Football fans were treated to a fantastic match between Barcelona and Inter Milan yesterday evening.  Inter had taken an early two goal lead, but the match ended 3-3.  Both sides were superb, the quality of football was exceptional.  The young superstar Yamal was playing his 100th match for Barcelona despite being just 17 years old.  Incredible.  I’m already looking forward to the second leg. 

Tonight sees one of the biggest matches in the European calendar, of course I refer to Spurs semi-final of te Europa League against Bodo/Glimt.  Man Utd will take on Bilbao, and Chelsea will hope their run of form in the Europa Conference League continues as they take on the mighty Djurgarden.  Meanwhile Forest will be hoping they beat Brentford this evening in their premier league fixture to take them back into the Champions League places.

Also in football, congratulations to Mark’s U14 Gurnard Comets team who finished third in their league and just five points off the top spot after a strong end to the season.  All bodes well for next season.

Today’s calendar brings more US jobs data this time in the form of Challenger job cuts and initial jobless claims, we’ll also have ISM manufacturing PMIs.  Aussie retail sales could offer some interest overnight, we’ll also be watching for any updated trade talk news from Trump.  Whether or not we believe it is another matter. 

-  12.30 US challenger job cuts

-  13.30 US initial jobless claims

-  14.30 CAD S&P manufacturing PMI

-  15.00 US ISM manufacturing PMI

-  23.45 NZ building permits

-  00.30 Japan unemployment

-  02.30 AUD retail sales, PPI