Global Economic News Weekly Update

Global Economic News Weekly Update

U.S. Federal Budget Balance Showed Significant Shift in May 2025

The United States Federal Budget Balance was routinely released, offering insights into the state's income versus expenditures. This balance was compiled from information from various government agencies and banks within the Federal Reserve System. On May 12, 2025, the Bureau of the Fiscal Service reported the latest forecast for this balance was approximately –$215.9 billion, representing the federal government's net financial position for that reporting month. This figure marked a notable shift from the previous forecast of around –$9.9 billion. The Federal Budget Balance provided a snapshot of whether the government had a surplus or deficit, reflecting its financial transactions over the period. Historically, a positive balance was sometimes associated with potential positive influences on the U.S. dollar, though this data point was considered alongside other economic indicators and market conditions due to the complex interplay of economic factors. The next release is expected on the 11th of June, 2025, with a positive trend forecast of $122.4 billion.

The United States CPI Showed Unexpected Contraction in May 2025

The United State CPI m/m data, released by the Bureau of Labor Statistics on May 13, 2025, with a forecast of 0.3%, which contrasted with the previous forecast of a 0.4% expansion, suggesting a notable shift towards deflationary pressures. The CPI, anchored to a 1982 reference period, measured fluctuating costs for consumer goods and services, and a contracting reading, if realized, implied a slowdown or even a decrease in prices. While conventional theory suggested rising CPI could strengthen the U.S. dollar, a negative reading hinted at potential uncertainty for the dollar's performance, but this data point was considered just one piece of a complex economic puzzle. The next update is on 11 June, 2025, which is expected to have a steady forecast.

Indian Rupee Saw Potential Boost from WPI Data

The Office of the Economic Adviser released the latest Wholesale Price Index (WPI) figures 15th of May, at 06:30, revealing a potential shift in the economic landscape. The index, which tracked price fluctuations of goods and services at the wholesale level year-over-year, registered a forecast of 1.79%, indicating a deceleration from the previous forecast of 2.78%. This moderation in wholesale price growth suggested a future easing of inflationary pressures at the consumer level, as the WPI often acted as a precursor to changes in retail prices. From a currency perspective, the implications for the Indian Rupee (INR) were not definitive but leaned towards a potential positive influence, as a controlled rise in wholesale prices could foster a more stable economic environment and support the INR's valuation, though this remained contingent on other economic factors. The coming report, dated June 16, 2025, is expected the same positive trend with a forecast of 0.38%.

Australian Employment Data Released: Gains Expected

The Australian Bureau of Statistics released the latest employment data for the nation on May 16, suggesting a potential increase of 36.5 thousand in employment for Australians for the reported month. The preceding period saw a contraction of -7.1 thousand, underscoring the inherent variability in economic indicators. The projected growth could have signaled a strengthening of the labor market and might have exerted upward pressure on the Australian dollar's valuation. However, this correlation was not deterministic, as numerous other factors contributed to currency fluctuations. The next update is expected on 19 June, with a positive sign of 44.2 K.

U.S. Census Bureau Data Revealed: Housing Starts Down From Previous Forecast

New data from the United States Census Bureau released on 16th of May, offers a look into the likely direction of the U.S. housing market. Housing Starts, which tracks new home construction begun in a given month, provides useful but not conclusive insight into the immediate future of the construction industry. The latest forecast for Housing Starts is 1.413 million, a decrease from the previous forecast of 1.445 million. This change suggests that various underlying factors are influencing building activity. Typically, an increase in Housing Starts can positively impact the dollar's value, as a strong construction sector often aligns with broader economic growth and investor confidence. However, this is a general trend, not a certainty, as many other economic variables mean that a rise in housing starts doesn't always lead to a stronger dollar.