U.S. Review
Bernanke Indicates No Easing Up on the QE Gas Pedal
• FOMC Chairman Bernanke gave no indication of scaling back asset purchases in his testimony this week and continued to emphasize weakness in the labor market and low inflation.
• The housing market’s recovery marches on, with sales activity increasing in April. Rising inventories for new and existing homes should help sales gain further traction, as the amount of stock remains constrained.
• Durable goods orders rose more than expected in April and suggest that the recent slowdown in manufacturing activity should be short lived.
Global Review
Duke Ellington Economics: In a Sentimental Mood
• In what was otherwise a fairly quiet week in terms of hard economic data, we focus instead this week on business sentiment. Survey data kicked off an equity market selloff on Thursday and offer clues about the future for the global economy.
• Outgoing Bank of England (BoE) Governor Mervyn King was outvoted at his penultimate BoE meeting this week, so there will be no expansion to the QE program.
Incoming Governor Mark Carney starts his era heading the MPC in July.
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Wells Fargo