Weekly Investment News
In the US, equities recorded modest gains for the week. On Friday, the Personal Consumption Expenditure (PCE) price index, the Fed’s preferred inflation measure for its 2% target, remained steady at 2.6% year-over-year in May, unchanged from the previous month. This marked the first time since last November that prices did not change on a monthly basis. Core PCE, which excludes volatile food and energy prices, came in at 2.6%, a 0.1% increase in May from April. The report was well-received, indicating a step in the right direction for inflation. The US 10-year treasury yield rose nearly 10 basis points on Friday. In addition, following the first presidential debate, over 60% of viewers believed Trump outperformed Biden.
Major European equity markets ended last week negatively due to political turmoil in France. Marine Le Pen’s far-right National Rally party won the first round of France’s parliamentary election over the weekend, securing over 33% of the vote. The left-wing New Popular Front received 28%, while President Macron’s Ensemble alliance came in third with just above 22% of the vote. However, Le Pen’s party still fell short of achieving an absolute majority in the National Assembly. The second-round election on 7th July will determine the country’s future. Amid the uncertainties surrounding the French election outcome, both European equity markets and the Euro are expected to remain volatile in the upcoming week.
In Canada, the Consumer Price Index (CPI) rose to 2.9% in May from 2.7% in the previous month, exceeding market expectations. Core CPI saw a yearly increase to 1.8%, up from 1.6% in April. Earlier in June, the Bank of Canada became the first G7 central bank to begin easing interest rates but following this hotter-than-expected inflation data, the likelihood of a July rate cut fell below 50%.