The new week will open up rather quietly when it comes to fundamental releases.
One of the few important reports today was the NBS manufacturing PMI from China. It indicated that this sector of the economy did not grow by as much as expected in May. Though the number is still above 50, which means the economy is growing, any failure to meet the forecasts is a bad sign for the Chinese economy and for countries like Australia, who are very dependent on it.
Another piece of news from China today included a shift in the government’s family policy. Due to China’s demographic problem (an aging population where the elderly will put a lot of strain on the shrinking number of working-age Chinese people in the near future), the government has decided to allow families to have up to three children.
Experts still believe that this will not be enough to address the crisis because most families simply cannot afford more children, but the government has announced that there will be new measures in place to help make raising children more affordable via tax breaks and cheaper education.
The other major report today was the inflation rate for May in Germany, which came in better than expected in both yearly and monthly terms. This release might suggest a similar performance tomorrow when the eurozone-wide inflation rate will be released.
Economic sentiment globally is positive today, and so the oil market is also doing well. The forecasts for the demand of oil in the near future are improving thanks to countries overcoming the coronavirus pandemic. For this reason, today oil prices are on the rise again, with Brent reaching $69.70 and the WTI trading around $67.26 per barrel.
One reason why the markets are a bit quiet today compared to other times is that the United States is celebrating Memorial Day, so there are no events or publications expected on that front today. Markets are also closed in the United Kingdom for a bank holiday.
