Summary
United States: Steady Hiring, Wilting Confidence and a Yawning Trade Gap
- There was plenty of employment data to digest this week, and broadly speaking, there is not yet hard data to support the notion that the labor market is rolling over, though it’s clearly losing momentum. Meanwhile, a pre-tariff spending spree partly explains why March consumer spending was also better than expected.
- Next week: ISM Services (Mon.), Trade Balance (Tue.), FOMC (Wed.)
International: Economics Is Like a Box of Chocolates
- Sometimes economics is like a box of chocolates, and this week’s international news is very much a mixed bag. The Bank of Japan held rates steady but highlighted trade concerns, and we have pushed back our expected rate hike to the October meeting. In Canada, PM Carney’s Liberal Party won this week’s election but fell short of an outright majority. On the data front, China’s April PMIs surprised to the downside, while in the Eurozone, GDP growth and inflation data were slightly firmer than expected.
- Next week: Brazil Selic Rate (Wed.), Riksbank Policy Rate (Thu.), Bank of England Policy Rate (Thu.)
Credit Market Insights: Vibe Check: How Resilient Is the U.S. Financial System?
- The Federal Reserve Board recently published its biannual Financial Stability Report, which provides an assessment of the U.S. financial system. The report—which reflects market conditions and data as of April 11—reviews vulnerabilities and near-term risks related to valuation pressures, borrowing by businesses and households, financial-sector leverage and funding risks.
Topic of the Week: Automakers Receive Some Tariff Relief
- This week, the White House issued an update to the administration’s 25% tariff policy on foreign-made auto imports, stating that the new 25% auto tariffs would not stack on top of other existing tariffs. Beyond the relief to domestic-based purchasers of U.S.-made autos, this provides some additional relief to foreign purchasers of these autos as well.
