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Link to full report and disclosures: Real-Time Insights, Economic and Financial Pulse
Real-Time Insights |
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Highlights |
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· Continued sharp declines in wholesale gasoline prices should exert further downward pressure on prices at the pump. Nationally, average retail gasoline prices have declined from a peak of over $5/gallon to $4.8/gallon and further declines are likely, which should temper m/m headline inflation momentum heading into Q3. | |||||||||
· The seven-day moving average of daily COVID-19 cases in China has increased to 300+ as new case clusters emerged in the wake of reopening after government lockdowns. Detection of the highly transmissible omicron BA.5 variant in Xi'an could spur a fresh round of lockdowns that would further jar economic activity. | |||||||||
· Front month contracts for natural gas in Europe have jumped to over 160 euros per MWh reflecting Russia's squeeze on the supply of natural gas which saw it cut gas deliveries through the Nord Stream 1 pipeline by 60% in mid-June. If Russia were to halt gas deliveries through the pipeline gas rationing would likely commence in Europe, with notable consequences for European manufacturing and industrial output. | |||||||||
· Spot container shipping rates continue to decline according to Drewry's World Container Freight Rate Index, with the composite benchmark rate per 40 ft container falling to just over $7,000 although they remain well above the pre-pandemic average of $1,500. | |||||||||
· Lumber futures have fallen significantly from their pandemic peaks but are more than double their pre-pandemic average. Futures have increased in recent weeks, rising from a low of $530 in mid-June to $640 per 1000 board ft in early July. | |||||||||
· Industrial metal spot prices declined further over the week reflecting expectations of slower global economic growth and softer global manufacturing output with copper prices falling 27% since early June. Global purchasing manager indices suggest global industrial production growth has slowed decidedly in recent months. | |||||||||
Week ahead: MBA Mortgage Applications, ISM Services Index, JOLTS, FOMC June Meeting Minutes (July 6); Initial and Continuing Claims (July 7); Employment Report (July 8) | |||||||||
Link to full report and disclosures: Real-Time Insights, Economic and Financial Pulse
Mickey Levy, mickey.levy@berenberg-us.com
Mahmoud Abu Ghzalah, mahmoud.abughzalah@berenberg-us.com
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