OPEC+ plans to exclude Russia from the group’s production. Inflation in the Eurozone is at a high level again

Christopher Waller of the Federal Reserve Board of Governors said the Fed should raise rates by 50 basis points (bps) at each meeting until US inflation begins to decline.

Statistical data released on Tuesday showed a decline in US consumer confidence in May. The index, calculated by the Conference Board research organization, fell to 106.4 points in May from a revised 108.6 points in April.

The Biden administration is trying to complement the Fed’s efforts to bring down inflation by lowering the cost of prescription drugs and health care, as well as proposing in Congress to increase the use of renewable energy.

Oil is getting cheaper as OPEC+ is considering excluding Russia from the group’s production. Western sanctions and a partial European ban undermine Moscow’s ability to produce more oil. Russia’s oil production is expected to fall by about 8% this year. For more than a year now, Saudi Arabia, which leads the 23-nation OPEC+ global alliance of oil exporters, has been making the group’s countries supply less crude than the market needs in order to maintain optimal prices per barrel. Although the supply crisis remained manageable until the end of last year, the invasion of Ukraine and subsequent sanctions on Russia have led to disruptions in production by at least another 3 million barrels a day.

Asian markets traded without a single dynamic yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.33% (+1.72% for the month), Hong Kong’s Hang Seng (HK50) was up 1.38% (+1.48% for the month), while Australia’s S&P/ASX 200 (AU200) was down 1.03% (-1.85% yesterday). May survey data from the Caixin survey indicated a shift to a more stable operating environment in China’s manufacturing sector, as firms reported much softer declines in both production and new orders.

Firms also recorded a slower decline in buying activity, although delays in the supply chain generally remained significant.

Australia’s GDP growth slowed in Q1 2022. The economy grew by 0.8% in the last quarter, down from 3.6% in Q4 last year. But it should be noted that the economy was recovering late last year due to the lifting of restrictions after the pandemic, so a GDP growth of 0.8% today is not a bad result compared to other global economies. In the coming quarters, Australia will face higher prices undermining purchasing power and rising interest rates, so analysts are forecasting a slightly reduced annual GDP growth rate in 2022 to 4.0%.