Beijing will reopen primary and secondary schools for in-person classes. Senior and middle high schools were allowed to return to classrooms from June 2, now all are reopening. Beijing shut its schools in early May and moved to online learning.

It’s a mixed bag still in Shanghai. The city’s Communist Party chief spoke on Saturday, saying his authorities had „won the war to defend Shanghai“ against COVID. Meanwhile in Shanghai,

• most students have not been allowed to resume in-person classes
• dining indoors is still banned
• mass PCR testing for its 25 million residents continues every weekend until the end of July

In Shenzhen on Saturday an announcement that it would shut all cinemas and parks, and all public events have been suspended in one district after 6 local cases were found. 50% capacity constraints were set for restaurants in the district

Shenzen residents must show a negative COVID-19 test to enter public venues & transport taken within the last 24 hours (from 48 hours previously).

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There are signs of improvement in China, but also setbacks. Volatility in reopening will continue, thus in the economy also.

China is struggling to emerge from 2020:

This article was written by Eamonn Sheridan at www.forexlive.com.

US first quarter growth was flat and the Atlanta Fed tracker for Q2 is currently at 0.0% so it will need to be a strong second half just to get to 2.9%.

In any case, these forecasts offer a sense of where the official consensus is.

• 2023 1.7% vs 2.3% in April
• 2024 +0.8%
• 2025 +1.7%
• 2026 +2.1%

As for monetary policy, they called for an ‚assertive and rapid‘ withdrawal of stimulus. 

In her comments, Georgieva also hints an global frustration with the intensity of US domestic demand and how it’s boosting prices everywhere. She said misjudgements by the Fed will result in negative outward spillovers to the global economy.

This article was written by Adam Button at www.forexlive.com.

Markets are pricing in a 27% chance that the Fed only does 50 basis points, so she might consider being careful here. And a big reason  the market is pricing that in is because that’s what the Fed guided. You can’t tell the market what you’re going to do and then say you’re only doing it because that’s what the market has priced.

In another sign of the mess the Fed finds itself in, Daly cited the UMich inflation expectations survey for the 75 bps hike rather than 50. Today that number was revised back down. She acknowledged that today, saying the revision ‚got my attention‘ while still saying that long-term inflation expectations have ‚ticked up‘.

She also laid out a strategy, saying that if they front load rate hikes they might not have to do as much. This commentary is a bit of a departure from the unrelenting hawkish talk lately.

This article was written by Adam Button at www.forexlive.com.