đŁ Friday 5/1/2025, Macro Newsletter
đ Market Performance
đU. S. Markets Mixed:
- Dow -0.57%, Nasdaq +0.04%, S&P 500 -0.04%, Russell 2000 -0.60%.
- 2-year U. S. Treasury yield +10.67bps to 3.9448%, 10-year yield +8.02bps to 4.4257%.
- DXY +0.33% to 98.9597.
- VIX +5.50% to 18.81.
- Brent Crude +7.75% to 112.49, LBMA Gold -1.06% to 4547.803.
đChinese ADRs Mixed:
- USD/CNH +83bps to 6.8483. Nasdaq Golden Dragon China Index -0.64%, PDD +0.39%, BABA -0.32%, JD -0.10%, NTES +1.55%, LI -0.17%, XPEV -1.80%, NIO +0.47%.
đEuropean Markets Broadly Lower:
- FTSE 100 -1.16%, CAC 40 -0.39%, DAX -0.27%. EUR/USD -0.33% to 1.1675.
đAsia (ex-China) & EM Mixed:
- Nikkei closed, KOSPI +0.75%, SENSEX30 +0.79%, JCI +0.41%, VNINDEX -1.16%, MXX -0.26%.
đđKey Focus
đThe U. S. released preliminary Q1 GDP and PCE data, along with March PCE figures.
- U. S. Q1 real GDP preliminary annualized quarter-on-quarter growth came in at 2.0%, versus expectations of 2.2% and the prior reading of 0.5%.
- U. S. Q1 real personal consumption expenditures preliminary quarter-on-quarter growth came in at 1.6%, versus expectations of 1.5% and the prior reading of 1.9%.
- U. S. Q1 core PCE price index preliminary quarter-on-quarter growth came in at 4.3%, versus expectations of 4.1% and the prior reading of 2.7%.
- U. S. March PCE price index rose 3.5% year-on-year, versus expectations of 3.5% and the prior reading of 2.8%; month-on-month it rose 0.7%, versus expectations of 0.7% and the prior reading of 0.4%.
- U. S. March core PCE price index rose 3.2% year-on-year, versus expectations of 3.2% and the prior reading of 3.0%; month-on-month it rose 0.3%, versus expectations of 0.3% and the prior reading of 0.4%.
âď¸ Comment: U. S. preliminary Q1 real GDP annualized quarter-on-quarter growth came in slightly below market expectations, slowing from the stronger pace seen in Q4 2025. Structurally, the main support came from government spending, with growth rebounding to 4.4% from -5.6%, and investment, where growth rose to 8.7% from 2.3%. More endogenous consumer momentum weakened, however, with consumer spending growth slowing from 1.9% to 1.6%, making it the main drag. Revisions will be the next focus.
On inflation, headline PCE rose to 3.5% year-on-year, the highest in nearly three years, mainly driven by higher oil prices. Personal consumption expenditures rose 0.9% month-on-month in March, while income rose 0.6%, suggesting some degree of consumption pull-forward. Core PCE was broadly in line with expectations. By component, goods prices rose 1.4% month-on-month, services prices rose 0.3%, food prices rose 0.6%, and energy prices surged 11.6%, leaving the overall inflation mix characterized by âenergy-driven, core-moderate.â Overall, the trend remains relatively mild, suggesting core inflation pressure is still within a manageable range, though the next key thing to watch is whether oil prices begin to retreat.
đU. S. initial jobless claims for the week ended April 25 came in at 189,000, versus expectations of 212,000 and the prior reading of 215,000, revised up from 214,000.
- U. S. continuing jobless claims for the week ended April 18 came in at 1.785 million, versus expectations of 1.815 million and the prior reading of 1.808 million, revised down from 1.821 million.
âď¸ Comment: Initial jobless claims continued to trend lower this week and came in well below market expectations, reaching the lowest level since September 2022. The four-week moving average fell to 207,000, below the historical average of 225,700 for the same period. Continuing claims fell below 1.8 million, while the prior reading was revised lower. Overall, the labor market remains resilient, in line with the Fedâs statement on Wednesday that employment has shown âlittle change.â The next focus will be next weekâs April nonfarm payrolls report.
