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First: Japanese economic data – conflicting signals between growth and price stability
1. Annual Bank Lending (Bank Lending y/y)
- Result : 2.4%
- Expectations : 2.3%
- Previous reading : 2.3%
- Analysis :
This reading means that Japanese banks increased lending by 2.4% compared to last year, a slight improvement that indicates some financial activity, but not enough to be considered a strong driver of economic growth. This limited lending growth may be due to improvements in some business or consumer activities, but it does not yet reflect a broad-based shift.
2. Current Account
- Result : 2.31 trillion yen
- Expectations : 2.59 trillion yen
- Previous reading : 2.72 trillion yen
- Analysis :
A declining current account surplus is a relatively negative sign and may be due to a decline in exports or a rise in the cost of imports, particularly energy imports, which directly impact Japan’s balance of payments. A declining surplus could negatively impact the Japanese yen because it indicates a decline in foreign currency inflows.
3. Final GDP Price Index y/y
- Result : 3.3%
- Expectations and previous reading : 3.3%
- Analysis :
The stability of this indicator indicates that price levels relative to GDP have not changed compared to last year, implying that inflationary pressures remain present but stable. This reading does not provide a direct impetus for action by the Bank of Japan at this time.
4. Quarterly GDP (Final GDP q/q)
- Result : 0.0%
- Forecast : -0.2%
- Previous reading : -0.2%
- Analysis :
The positive surprise here is that the Japanese economy did not contract as expected. After two consecutive quarters of contraction, achieving zero growth is a sign that the economy has entered a technical recession without further deterioration. While this is a better-than-expected result, it reflects a weakening in overall economic momentum.
Second: US inflation data expected on Wednesday – a sensitive indicator of interest rate trends
1. Monthly Consumer Price Index (CPI m/m)
- Expected : 0.2%
- Previous : 0.2%
- Analysis :
Any reading above 0.2% could indicate a return to inflationary pressures, especially given the stability of the labor market. However, if expectations are met, this reinforces the “soft landing” scenario for the economy, where inflation slows without the need for a sharp economic slowdown.
2. Annual Consumer Price Index (CPI y/y)
- Expected : 2.5%
- Previous : 2.3%
- Analysis :
The increase in the annual reading is a worrying development, as it indicates that the pace of decline in inflation has stalled or reversed. This may prompt the Federal Reserve to wait further before making any decision to cut interest rates, especially since 2.5% remains above the 2% target.
3. Monthly Core Consumer Price Index (Core CPI m/m)
- Expected : 0.3%
- Previous : 0.2%
- Analysis :
The core index, which excludes food and energy, is the most important for policymakers. A reading as expected or higher would reflect continued underlying price pressures. Such a result would dampen market hopes for an imminent interest rate cut.
Third: Apple’s annual developers conference – a test of investor confidence
- The conference begins today, and investors are eagerly awaiting CEO Tim Cook’s speech.
- Apple shares have fallen nearly 20% since the beginning of the year, a significant decline compared to other major tech companies.
- The primary reason for this decline is the market’s perception that Apple has not capitalized sufficiently on the AI boom, while companies like Nvidia and Microsoft have seen significant gains thanks to their early adoption of new technologies.
- Investors are waiting for clear indicators about:
- How will Apple integrate artificial intelligence into its products?
- Are there any new devices or quality updates coming?
- How does the company deal with tariffs and trade tensions?
Fourth: US-China trade talks – new signs of calm
- US President Donald Trump held a phone call with his Chinese counterpart, Xi Jinping, and described the conversation as “very good.”
- A new round of talks between officials from both sides was agreed to be held in London on Monday.
