These are the 5 key economic issues that will mark the week | Economy

A possible volatility of the dollar in the middle of the week, the measures to alleviate global inflation and the rise in oil prices are some of the most relevant economic issues for this week. At the local level, the Imacec of April 2022 will be known.

This week ends May and on Wednesday the Central Bank will report the Monthly Index of Economic Activity (Imacec) for April, which could generate some volatility in the exchange rate at the local level.

In parallel, this Monday the National Institute of Statistics reported that during the moving quarter February-April 2022 the unemployment rate stood at 7.7%lower than projected by analysts (7.9%).

In a broader view, the dollar in Chile remains below $830 and stocks rallied, posting their first seven days of gains since late March.

These days, in addition, it will be known the unemployment in the United States, country where the “ghost” of the recession.

1 dollar

The price of the dollar has shown downward pressure in recent weeks, despite a rebound from Friday’s lows. This, in the midst of a global greenback correction and a copper boost.

From Capitaria they detailed BioBioChile that it is possible that new falls in the value of the exchange rate will be registered in the short term, since this week “the key US employment data and comments from members of the Federal Reserve”.

Additionally, this Wednesday the Central Bank of Chile will publish the Imacec for April, a figure that could generate volatility in the exchange rate.

2. Inflation and recession

Last Wednesday, the Federal Reserve reiterated its commitment to fight inflation where the minutes were in line with expectations.

The market has been taking any new data more calmly and on Friday the general price index for personal consumption expenditures (PCE) for April showed that inflation increased by 6.3% year-on-yearslowing from the March reading, adding to the list of signs that inflation may have peaked in March.

The estimate of the US GDP growth rate suggested a shrinkage of -1.5% in the first quarter of the year, slightly below initial estimates of -1.4%. Considering this, and assuming that the economy falls further during the second semester, The United States could fall into a recession.

“The strong increase in prices, the lower liquidity in the markets and the increasingly difficult access to money in the largest economy in the world, has had a great impact on economic activity, generating strong fears on the part of investors”, explained the head of trading studies at Capitaria, Ricardo Bustamante.

The expert added that as inflation continues to rise, “the probability of stronger rate hikes increases, generating expectations of a growing impact on the US economy.”

More than 50% of Wall Street professionals believe that the Fed’s fight against inflation will lead to a recession and eight out of ten small business owners believe the US economy will enter a recession this year.

3. Employment data

As is customary, the first Friday of each month the official US employment figures, which will be revealed this week. These data are very relevant – underlined from Capitaria – “considering that the market is susceptible to inflationary figures and to everything that may give signs of the economic ‘health’ of the United States”.

If figures are seen that are lower than projections, investors would show concerns about the impact on economic activity, which has already been reflected with a negative GDP during the first quarter of the year.

4. Oil

The price of oil shows a greater rebound at the beginning of the week, where the WTI has registered its maximum since March of this year, in the midst of Russia’s attack on Ukraine.

This rebound would be due to the concerns generated in the crude oil market by the meetings that will take place between today and tomorrow in the European Union, where a sixth package of sanctions against Russia.

“If new prohibitions of Russian oil are seen, the market will again feel that lower supply, a situation that would support new increases in the short term,” they specified from Capitaria.

5. Wall Street Stocks

The main Wall Street indices closed a positive week.

For his part, the S&P 500 and Nasdaq ended seven-week losing streakwhile the Dow Jones ended with one of eight.

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