We are facing a week of important economic publications in the USA. In Europe, stock markets start Monday in an upward mood. Cryptocurrency prices seem to be picking up after blows from Chinese and US authorities.
The second estimate of U.S. GDP for the first quarter to be released this week is expected to confirm that the economic recovery has gained momentum, helped by the country's reopening efforts, a powerful government stimulus package and one of the most successful vaccination campaigns in the world.
This week we will also learn about publications on: Americans' personal income and spending, the PCE price index, durable goods orders, Conference Board consumer confidence, new home sales, the Chicago Fed domestic activity index, the Chicago PMI, Case-Shiller home prices or the final Michigan consumer sentiment reading.
Important voice from the ECB
Across the Atlantic, the European economic calendar is quiet. Germany will publish final GDP data for the first quarter. They are likely to confirm that Europe's largest economy, after two consecutive periods of growth, has started to contract again, mainly due to a decline in private consumption. Nevertheless, business sentiment among German entrepreneurs improved in May to the highest level in two years.
Financial markets continue to be in a very good mood. European stock markets are near record highs on Monday, and investors seem to be looking forward to a good corporate earnings season and a solid economic recovery in Europe, supported by reopening efforts, a rapid pace of COVID-19 vaccination, and continued support from the ECB and governments across the region.
On Friday, ECB European Central Bank chief Christine Lagarde said it was too early to discuss ending the 1.85 trillion euro emergency bond-buying program, despite a strong rebound in activity and demand and concerns about rising bond yields.
France's CAC 40 index remained close to its highest levels since the end of 2000, Spain's IBEX 35 index posted a slight gain and set a 14-month high, and the FTSE 100 index also rose near a 14-month high.
Are prices turning around after the shock?
Prices of bitcoin and other cryptocurrencies seem to be on the rise again after the bottom triggered by the tightening of regulations by the US Chinese financial authorities.
Cryptocurrency exchange Huobi on Monday suspended both cryptocurrency mining and trading services for Chinese customers, and Chinese authorities warned financial institutions against accepting cryptocurrencies as a means of payment. The U.S. Treasury Department, on the other hand, announced that it will require any transfer of $10,000 or more to be reported to the IRS (U.S. Internal Revenue Service). Despite last week's massive declines, the price of bitcoin is up about 300 percent year-over-year, while ethereum is up more than 840 percent.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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