Central bank decisions were heavily watched last week after both New Zealand the United Kingdom delivered the latest monetary policy decisions. In an unsurprising move, the Reserve Bank of New Zealand left interest rates on hold at 1.75% while promising to keep rates accommodative for the foreseeable future. Traders anticipate no action until 2018 at the very earliest amid the rockier inflation outlook outlined by RBNZ Governor Graeme Wheeler. The Bank of England also refrained from adjusting interest rates despite inflationary pressure. Shifting gears, Chinese fundamentals remain on shaky ground, with the latest trade surplus expansion coming on the heels of a sharp deceleration in export growth which was outpaced by the tapering pace of import expansion.
Consumer prices managed to notch moderate gains, however, producer price growth slid markedly, falling to 6.40% from 7.60% through the end of April, underscoring concerns that government efforts to cool leverage is having an adverse impact on commodity prices. To cap off the week, the latest US inflation growth slowed modestly, with both headline and core annualized CPI figures pulling back amid the gradual passing of the energy price rally. The Nasdaq Composite surged to a fresh record to close out the week while the S&P 500 and Dow futures ended the week lower.