Welcome to your weekly macro roundup. This comprehensive edition covers the United States, Europe, and key emerging markets with in-depth analysis of the week's most significant economic developments and what they mean for markets ahead.

🇺🇸 Warsh walks into a supply shock the Fed cannot fix

BLS Stage 1 intermediate producer prices surged +3.2% in May, the largest monthly advance since the series began, as the Hormuz supply shock embeds in production costs. Kevin Warsh enters his first FOMC meeting June 16-17 with headline CPI at +4.2% YoY and payrolls at 172,000 against an 80,000...

🇺🇸 Warsh walks into a supply shock the Fed cannot fix
BLS Stage 1 intermediate producer prices surged +3.2% in May, the largest monthly advance since the series began, as the Hormuz supply shock embeds in production costs. Kevin Warsh enters his first FOMC meeting June 16-17 with headline CPI at +4.2% YoY and payrolls at 172,000 against an 80,000...
Macro Soup

🇪🇺 ECB arrives at neutral after first hike in three years as services inflation keeps September alive

The ECB raised its deposit facility rate to 2.25% in its first hike after eight consecutive cuts, as eurozone CPI hit 3.2% in May. Services inflation at 3.5% makes September a live meeting.

🇪🇺 ECB arrives at neutral after first hike in three years as services inflation keeps September alive
The ECB raised its deposit facility rate to 2.25% in its first hike after eight consecutive cuts, as eurozone CPI hit 3.2% in May. Services inflation at 3.5% makes September a live meeting.
Macro Soup

🇬🇧 UK April GDP contracts 0.1% as services run hot, boxing in the BoE before June 18

UK April GDP contracted 0.1%, dragged by a 0.2% fall in services output even as services inflation holds at 3.2% year-on-year. With one MPC member already dissenting for a hike, a June 18 Bank of England cut is increasingly hard to justify.

🇬🇧 UK April GDP contracts 0.1% as services run hot, boxing in the BoE before June 18
UK April GDP contracted 0.1%, dragged by a 0.2% fall in services output even as services inflation holds at 3.2% year-on-year. With one MPC member already dissenting for a hike, a June 18 Bank of England cut is increasingly hard to justify.
Macro Soup

🌏 A war premium, not the Fed, forced Bank Indonesia's first emergency rate hike in eight years

Bank Indonesia raised rates an unscheduled 25 basis points to 5.50% on June 9 as the rupiah touched a record 18,020 to the dollar. The driver isn't a Fed pivot. It's a war premium, and from Jakarta to Pretoria to Seoul, EM central banks are being forced to respond.

🌏 A war premium, not the Fed, forced Bank Indonesia's first emergency rate hike in eight years
Bank Indonesia raised rates an unscheduled 25 basis points to 5.50% on June 9 as the rupiah touched a record 18,020 to the dollar. The driver isn't a Fed pivot. It's a war premium, and from Jakarta to Pretoria to Seoul, EM central banks are being forced to respond.
Macro Soup

🇨🇳 China's 41-month deflation subsidy ends as PPI hits a near four-year high

China's PPI rose 3.9% year on year in May, the highest since July 2022, closing 41 months of factory-gate deflation. The disinflationary goods channel that gave the Fed and ECB cover is now running in reverse.

🇨🇳 China's 41-month deflation subsidy ends as PPI hits a near four-year high
China's PPI rose 3.9% year on year in May, the highest since July 2022, closing 41 months of factory-gate deflation. The disinflationary goods channel that gave the Fed and ECB cover is now running in reverse.
Macro Soup

That wraps up this week's macro roundup. We'll be back with daily updates throughout the week and another comprehensive weekly edition next time. If you know someone who would appreciate this analysis, feel free to share. More signal, less noise, as ever. Cheers.