Europe

With Mario Draghi praising the European economy in his quarterly speech at the European Parliament, albeit conceding that inflation is still too low for the ECB to remove its unprecedented monetary support, one would be left with the impression of a slow, steady European recovery, also explaining the recent record inflow into European stocks. Alas, as is often the case, the full story is just below the surface. And it is here that a big problem is emerging.

Focus in this holiday-shortened week will turn to US data, especially NFP, Fed speakers and Eurozone inflation. UK PMIs will also draw attention as elections approach. We also get GDP data from Canada, Sweden and Switzerland. In EM, there are MP meetings in Brazil & Israel. On Monday, with US, UK and Chinese markets closed, Euro FX and bond markets will be on Mario Draghi alert on Monday as the ECB president speaks to the European parliament.

NFP, Fedspeak, Eurozone inflation

The price of gold went up $12 this week, and that of silver $0.50. That’s not bad for gold and silver owners, and not good for the vast majority who are all-in on the dollar (though they don’t think of it that way).

Since we began publishing this Supply and Demand Report four and a half years ago, there have been several constants. One, we have focused on the supply and demand fundamentals, and the mechanics of the market.

U.S. markets are closed for the Memorial Day holiday, and with UK and Chinese markets also closed for various holidays, it has been a quiet start to the week, with S&P futures essentially unchanged, trading at  2,415, up 0.06%, a new all time high.

The US economy is struggling with too much debt at every level. A debt jubilee isn’t going to solve it; and shifting demographics will likely make it worse. So, is America headed for two decades of lost growth like Japan? Dr. Lacy Hunt, who was interviewed by Erik Townsend on the latter's MacroVoices podcast, considers the endgame for the US economy... Well, we could get lucky, Hunt says.