The US Fed maintains policy rates in May, slows pace of balance sheet unwinding
China's growth comes in steady at 6.4% in the first quarter of 2019
Crude oil prices rise 7.7% on-month in April to average $71.2 per barrel on supply shortage
The slew of negative economic headlines in the recent past have been capturing global growthuncertainties. The International Monetary Fund has downgraded the growth forecast, the Brexitconundrum is stretching on, the dispute between the United States (US) and China is affectingtrade, and the global oil market is as volatile as ever.
Thus, when gross domestic product (GDP) growth data for the first quarter (Q1) of 2019 waspositive, it held a few surprises for major economies. Growth improved or remained stable in Q1over the previous quarter in most economies, beating market expectation of a slowdown. Growthimproved in the US, euro area (EA) and the United Kingdom (UK), and remained stable in China.
Along with growth, inflation too has been rising in most global economies, mainly led by a surge inenergy prices. The on-going geopolitical tension between the US and Iran, and supply cuts by themajor oil producing countries have been pushing up crude oil prices. A sustained pick-up ininflation could cause the major central banks to take a less dovish stance as they stay on thesidelines to support growth while keeping inflation within their target band.