Inspiration’s breakdown

After spending a wonderful week’s vacation in sunny Ibiza, enjoying both the beautiful scenery during the day and the vibrant electronic scene in the evening, it’s a bit hard to get back to work this morning… And I’m not even talking about the slap, or rather the “quasi-Manita”, that Cagliari received this weekend against Milan (victorious 5-1) in Serie A. In short, I’m suffering from a lack of inspiration to produce something (I deem) new, original and interesting.  As a result, I finally asked ChatGPT how to overcome my creativity blockage and regain inspiration.

Among its suggestions, I have already implemented a few such as “take a break” (actually I just took one last week) or “find inspiration” (I read a few interesting articles and analysis over the week-end on top of a mountain walk with friends), some are unrealistic (“change your environment”) or too late now to apply (“practice brainstorming”) as the clock is ticking. So, I picked this advice: “accept the block”, especially as the clock is ticking… Still according to ChatGPT, “sometimes, resisting the block can make it worse. Accept that it’s part of the creative process and be patient with yourself.” I am not a big fan/user of ChatGPT, but I must admit, it saved me a lot of time and work today, while taking away most of my last remorse. What’s more, I could even say that this shorter-than-usual letter will indirectly participate in the last mile of the disinflation process the Fed and investors are desperately looking for…

Economic Calendar

The key highlights of the week will be the US CPI print for April and the Chinese economic activity indicators due on Wednesday and Friday respectively. In the US, other notable data releases include the NFIB Small Business Index (tomorrow), April retail sales (Wednesday) and industrial production (Thursday) and some US housing market gauges over the week (NAHB housing market index, housing starts & building permits). Elsewhere, we will get the Japan Q1 GDP (a contraction is expected), the latest German ZEW Economic Sentiment or the final Euro Area CPI reading for April, as well as some important companies earnings results from across the world (US, Europe, China, Japan & India).

Following 3 consecutive higher than expected CPI monthly readings and the subsequent repricing of US policy rates from seven cuts in 2024 to just one some days ago (and about two currently), the April US CPI (Wednesday) is undoubtedly a key data release for both investors, central bankers and Fed watchers. The consensus expects a monthly increase of +0.4% for the headline (same as in March) and +0.3% for the core index (vs. +0.4% in March), resulting in a slight deceleration of the YoY% annual growth to 3.4% and 3.6% respectively, down from 3.5% and 3.8%. Note that we will also get the US PPI the day before, as well as import and export prices the day after.

Apart from US prices trends, the focus will also be on health of the US economy this week with the April retail sales (Wednesday) and industrial production (Thursday). Moderate/slowing gains are expected for both in April. Speaking about retail sales and industrial production, investors will keep an eye on US retailers’ results (Walmart and Home Depot) to assess the state of the US consumer, as well as on the regional manufacturing indices for May on which is based our ISM mfg forecasting model.

Staying and concluding with corporate earnings, notable names in the US on top of the retailers mentioned above include Cisco, Applied Materials and Deere. Elsewhere, notable reporters include Tencent, Alibaba and Baidu in China; SoftBank, Sony & Mitsubishi UFJ in Japan; Allianz, Rheinmetall, Siemens and Deutsche Telekom in Europe, or NTPC and DLF in India.