Global Economic Summary: June 3 to June 8, 2024

United States

- Economic Data: Personal consumption expenditures at 2.7%, core expenditures at 2.8% in April. ISM services PMI increased to 53.8 in May.

- Nonfarm Payrolls: Job market surged in May with a 272,000 increase in nonfarm payrolls, exceeding projections. Average hourly earnings rose by 0.4% from April and 4.1% from the previous year. Unemployment rate rose to 4% from 3.9%.

- Monetary Policy: Fed’s Neel Kashkari emphasised high interest rates to control inflation. Biden’s administration tightened immigration rules and criticised Israeli PM Netanyahu’s actions.

United Kingdom

- Political Developments: PM Rishi Sunak proposed an annual migration cap. Nigel Farage led Reform U.K., with Labour’s lead narrowing in polls. British Chambers of Commerce urged better E.U. trade relations.

- Economic Data: Local Government Association reported a £6.2 billion funding gap. Sunak hinted at inheritance tax cuts.

Eurozone

- Monetary Policy: ECB officials cautious on further rate cuts.

- Economic Data: German unemployment increased by 25,000 in May, unemployment rate at 5.9%. Eurozone industrial production showed modest growth, with inflation a key focus.

Japan

- Monetary Policy: BOJ intervened in currency markets, supporting the yen. Finance Minister Suzuki suggested potential further action. Real outlays rose by 0.5% year-over-year in April.

- Economic Data: Services producer price index increased by 2.8%, indicating inflation trends.

China

- Economic Data: Caixin manufacturing PMI rose to 51.7 in May. PBOC faces pressure to allow the RMB to weaken.

- Trade and Investment: Chinese investments in Vietnam and Mexico increased amid rising trade tensions with Western nations.

Canada

- Monetary Policy: Bank of Canada cut interest rates to 4.75%. Governor Tiff Macklem emphasised the need for a less restrictive monetary policy.

- Economic Data: Continued economic growth focusing on inflation management.

Australia

- Economic Data: Retail sales grew by 0.1% in April, and GDP growth slowed to 0.1% QoQ in Q1 2024. New loans to home investors rose by 5.6% in April.

- Monetary Policy: Analysts suggest AUD may struggle due to reluctance to raise rates and weak economic support from China.

New Zealand

- Monetary Policy: RBNZ resumed discussions on interest rate hikes amid economic uncertainties and inflation pressures. Finance Minister Nicola Willis introduced a tax-cut package for low and middle-income households.

Artificial Intelligence (A.I.)

- Sector Developments: Nvidia’s market cap exceeded $3 trillion. OpenAI expanded partnerships. Saudi Arabia invested in Chinese A.I. startup Zhipu AI. U.S. regulators are scrutinising the A.I. sector for potential monopolistic behaviour.

- Technological Advances: Musk’s xAI plans for a supercomputer facility indicate significant A.I. infrastructure investments.

Environmental, Social, and Governance (ESG)

- Sector Developments: Global investors withdrew $40 billion from ESG equity funds due to poor performance and political attacks. IEA warned that current clean energy plans fall short of the 2030 goals set at the U.N. climate talks. U.S. and E.U. political pressures influence climate law adjustments.