Profits earned by China's industrial firms dropped by 20.6% from a year earlier to CNY 2,032.88 billion in the first four months of 2023, amid a weakening economic recovery, feeble demand, and margin pressures. The decline followed a 21.4 % plunge in the prior period and a 4% fall in 2022, with profits shrinking in both state-owned firms (-17.9% vs -16.9% in Jan-March) and the private sector (-22.5% vs -23.0%). Among the 41 industries surveyed, 27 saw losses, namely ferrous metal smelting and rolling (-99.4%), petroleum, coal (-87.9%), chemical products (-57.3%), non-ferrous metal smelting and rolling (-55.1%), computer, communication, & electronic equipment (-53.2%), agricultural & food processing (-36.3%), textile (-30.2%), non-metallic mineral product (-27.4%), coal mining & washing industry (-14.6%), special equipment manufacturing (-7.4%), and oil & natural gas extraction industry (-6.0%).

US equities surged on hopes of a debt ceiling deal, with Dow Jones up 329 points and S&P 500 rising 1.3%. Nasdaq Composite jumped 2.2%, driven by Marvell's 32% spike after strong revenue projections due to AI technologies, in line with Nvidia on Thursday. Treasury Secretary Yellen announced the department expects to be able to make payments on US debts up until June 5, buying time for debt ceiling talks. It comes after White House and Republican negotiators appeared to be closing in on a compromise agreement to raise the debt ceiling for two years but were still clashing Friday. The positive mood persisted despite hotter-than-expected PCE inflation data, reinforcing bets the Federal Reserve will maintain its hawkish stance and keep interest rates elevated for an extended period. On the corporate front, retailer GAP soared 12% after the company's earnings beat on the upside. For the week, the Dow lost 1% while the S&P went up 0.3% and the Nasdaq notched its fifth straight week of wins.

The S&P/TSX composite index of the Toronto Stock Exchange added 0.7% to 19,920 on Friday, recovering from a three-day losing streak that pushed the index to a 2-month low in the prior session, due to investor confidence received a boost from the upward movement in commodity prices and optimism surrounding a potential resolution of the US debt limit issue. In terms of corporate news, Canadian Western Bank announced that it no longer anticipated meeting its annual pre-tax, pre-provision income target and adjusted its expectations for lower annual growth compared to previous forecasts. Waste treatment company Anaergia reported that one of its units, Rialto Bioenergy Facility, had initiated restructuring proceedings, which could potentially have a positive impact on its cash flows in 2023. However, silver miner Silvercorp Metals fell short of analyst expectations on quarterly earnings and sales.

The ruble-based MOEX Russia index advanced more than 2% on the week to 2682, the highest since April 2022 driven mainly by dividend news. Companies such as Lukoil (+1.6%), Inter RAO (+1.1%), and PhosAgro (+0.9%) saw their stock prices rise after shareholders approved dividend payments. Additionally, Sberbank's shares continued to rise, closing the dividend gap and reaching a yearly high. On the other hand, Gazprom Neft's board of directors recommended dividend payments that were lower than market expectations and sank sharply before recovering at the end of the week. Support for the Russian market also came from strong oil prices after the Saudi Arabian Energy Minister recommended caution to oil speculators betting on a decline.

US equities were trading higher on Friday, with the Dow Jones surging nearly 300 points and the S&P 500 up by over 1% as traders became more optimistic about lawmakers reaching a deal to raise the US debt ceiling. The Nasdaq Composite surged more than 2%, led by a 29% jump in shares of Marvell Technology after the company projected a significant revenue surge due to artificial intelligence technologies, in line with Nvidia on Thursday. The White House and Republican negotiators were nearing a consensus on a compromise agreement to extend the debt ceiling for a duration of two years. The positive mood persisted despite hotter-than-expected PCE inflation data, reinforcing the bets that the Federal Reserve will maintain its hawkish stance and keep interest rates elevated for an extended duration. On the corporate front, retailer GAP soared 13% after the company's earnings beat on the upside.

The Japanese fell beyond 140 per dollar, its lowest level in six months amid widening monetary policy divergence between Japan and the US. The Bank of Japan has maintained its policy of ultra-low interest rates despite market pressure and persistent inflation. The headline inflation rate in Japan unexpectedly accelerated to 3.5% in April despite forecasts for a further slowdown to 2.5%, while the core inflation rate rose to a three-month high of 3.4%. On the other hand, the expectations are growing that the Federal Reserve will deliver another rate hike and keep rates elevated for an extended period. The most recent PCE inflation data surprised on the upside while personal spending rose more than expected. Still, Japanese Finance Minister Shunichi Suzuki said that currency rates should be set by markets based on economic fundamentals while adding that the government will watch market moves closely.

The FTSE 100 added 0.7% to 7,627 on Friday, driven by mining stocks following the rise in metal prices. Global miner Rio Tinto gained 3.5% after receiving an upgrade from a brokerage firm. Precious metal miners benefited from higher gold prices, which rose against a weaker dollar as traders monitored the progress of US debt ceiling negotiations. At the same time, retail sales in the UK rose more than expected last month, led by sales of watches and jewellery and at department stores, offering some evidence that consumer spending remains resilient despite high inflation. Among single stocks, AstraZeneca went up 1.2% after reporting positive results in a late-stage trial of its cancer drugs. Insurer and asset manager M&G also saw gains after a price target raise by Morgan Stanley. On the other hand, cybersecurity company Darktrace tumbled 11% and tech firm Kin & Carta suffered a 9.0% decline after reducing its annual revenue expectations. For the week, the FTSE 100 lost 1.7%.

US debt deal negotiations have entered the final stage, but it is likely that last-minute changes will continue to take place until the June 1st deadline. On the data front, investors are expected to closely follow the US labor report, JOLTS job openings, ISM Manufacturing PMI, and CB consumer confidence. Additionally, inflation rates are anticipated for the Euro Area, Germany, France, Italy, Spain, and South Korea. Q2 GDP growth rates will be released for Canada, India, Brazil, and Turkey, along with manufacturing PMIs for China, Italy, Spain, Canada, Russia, India, and South Korea.

In London the FTSE 100 Index went up by 56 points or 0.74 percent on Friday. The rise was driven by Rio Tinto (3.71%), M&G (3.62%) and BHP (3.29%). Biggest losses came from Polymetal International (-4.65%), British Land Company (-1.93%) and Vodafone (-1.91%).

The FTSE MIB gained 1.2% to reach 26,713 on Friday, tracking the positive performance of other European markets as optimism stemmed from progress in the US debt ceiling negotiations. Notably, STMicroelectronics surged 3.9%, building on the momentum generated by Nvidia's results and guidance on Thursday. Interpump and Amplifon also saw positive gains, increasing by 2.7% and 2.5% respectively. However, over the course of the week, the FTSE MIB recorded a decline of nearly 3%.

The CAC 40 surged 1.2% to the 7,319 level on Friday, tracking a global stock rally, as investors grew increasingly optimistic a deal on the US debt limit will soon be reached. Tech shares extended gains, with STMicroelectronics among the top performers (3.7%). Luxury stocks were also higher, with LMVH gaining 2.7%, Hermes 2.4% and Kering 1.8%. On the week, however, the CAC 40 lost 2.2%.

Canada’s government budget deficit widened to CAD 44.4 billion in March 2023, from CAD 25.7 billion in the corresponding month of the previous year. Revenues decreased by $1.8 billion, or 4.5 percent, largely reflecting the one-time Grocery Rebate announced in Budget 2023. Program expenses excluding net actuarial losses were up $15.7 billion, or 25.3 percent, largely reflecting higher provisions for contingent liabilities and loans, and increased transfers to other levels of government. Public debt charges were up $1.3 billion, or 53.3 percent, reflecting higher interest rates. Net actuarial losses were down $0.1 billion, or 9.3 percent. The government posted a budgetary deficit of CAD 41.3 billion for the April to March period of the 2022-23 fiscal year, compared to a deficit of CAD 95.6 billion reported for the same period of 2021-22.

The euro hit a 9-week low of $1.0706 on general dollar strength as expectations increased that the US Federal Reserve will deliver another rate hike and keep the rates higher for longer. US consumer spending grew more than expected boosting Q2 growth prospects while the PCE inflation surprised on the upside. Meanwhile, the White House and Republicans were moving closer to an agreement to raise the debt limit and cap federal spending for two years. The Euro weakness persisted despite the European Central Bank's pledge to proceed with interest rate hikes throughout the year. Klaas Knot, the chief of the Dutch Central Bank, recently expressed the view that the ECB should implement at least two additional 25-basis-point interest rate hikes and considered market expectations of rate cuts in early 2024 overly optimistic.

European shares staged a recovery at the end of a volatile week, bouncing back from multi-week lows on Friday. Germany's DAX 40 index surged by 1.2%, reaching 15,984 points, while the pan-European STOXX 600 also climbed by the same margin, reaching 461 points. Investors remained cautious but gained some confidence as negotiations in Washington indicated progress towards reaching a deal on lifting the US debt ceiling. Reports suggested that the two sides were only $70 billion apart, keeping market participants on edge. In terms of corporate news, German media group ProSiebenSat.1 confirmed its full-year outlook, while Rio Tinto's stock received an upgrade from "equal weight" to "overweight" by Morgan Stanley. Additionally, French supermarket company Casino resumed trading after a temporary suspension earlier in the week. The company officially announced the start of court-backed negotiations with its creditors.

The S&P/TSX composite index of the Toronto Stock Exchange rebounded on Friday, breaking a three-day losing streak to trade around 19,900 points. The index had closed at 19,774 on Thursday, its lowest level since March 28th. Investor confidence received a boost from the upward movement in commodity prices and optimism surrounding a potential resolution of the US debt limit issue. In terms of corporate news, Canadian Western Bank announced that it no longer anticipated meeting its annual pre-tax, pre-provision income target and adjusted its expectations for lower annual growth compared to previous forecasts. Waste treatment company Anaergia reported that one of its units, Rialto Bioenergy Facility, had initiated restructuring proceedings, which could potentially have a positive impact on its cash flows in 2023. However, silver miner Silvercorp Metals fell short of analyst expectations on quarterly earnings and sales.