Economic releases this week point to widely different growth momentum in the global economy. Chinese activity data for April were much weaker than expected with retail sales dropping 11.1% y/y and industrial production down 2.9% y/y. The weak batch of data points to a negative q/q growth rate in GDP in Q2 and also suggests downside risk to our 4.7% growth estimate for this year. The government’s 5.5% target will require a significant amount of stimulus, which China does not look prepared to provide. The credit impulse was slightly weaker in April, pointing to moderate stimulus. A key driver of the weak Chinese data has been the outbreak of Covid-19 and the lockdowns by the Chinese authorities implemented to maintain their zero-Covid policy. While Shanghai is improving challenges persist in other cities such as Beijing and surrounding areas. The continued outbreaks highlight the difficulty in keeping Omicron contained and warns of more future lockdowns and supply chain disruptions. On a more positive note, US data released this week showed quite resilient private consumption and industrial production despite geopolitical uncertainty and rising inflation. US retail sales data grew quite strongly in April both in nominal and real terms (taking into account the rise in inflation). At the same time, industrial production was also stronger than expected and capacity utilisation increased further to 79%. This week Fed Chair Jerome Powell said that interest rates will rise until there is “clear and convincing” evidence that inflation is retreating. Global risk appetite remains fragile amid the imminent US monetary policy tightening and weakening Chinese outlook with global equity markets seeing a significant setback this week. In the euro area, inflation pressures are also broadening as headline and core inflation in April rose 7.4% and 3.5% compared to a year earlier. Especially service price inflation jumped higher in April due to a seasonal rebound in transport and recreational services, but also other services categories continue to rise. Rising input costs are still working their way through the consumer pricing chain. The continued building of underlying inflation pressures leaves little room for complacency from ECB, where we expect a 25bp hike at the July meeting. This week, Finland and Sweden officially applied for NATO membership amid the Russian invasion of Ukraine. However, the application ran into problems as Turkey voiced opposition to Swedish and Finnish membership given concern about the countries’ stance on the Kurds. Meanwhile, Russian president Putin said that were Sweden and Finland to join NATO it would “certainly provoke our response”. There will be plenty of data to absorb for markets over the next two weeks. In the US, a key focus will be the FOMC minutes on 25 May, personal consumption expenditures on 27 May (not so much on the inflation component as we got the CPI already but more the consumption). The jobs report on 3 June will also be very important. In the euro area, the PMIs on 24 May will be key along with the May flash CPI on 31 May, as well as the EU leaders summit on 30-31 May, where an energy embargo will be high on the agenda. Download The Full Weekly Focus

EUR/USD The Euro is standing at the back foot on Friday, following 1.2% advance on Thursday, but dips were so far limited, adding to positive signal from Thursday’s bullish engulfing pattern. Fresh bullish momentum on daily chart and formation of 5/10DMA bull-cross, underpin the action for potential stronger short squeeze. Bulls need repeated close above 1.30532/45 (20DMA/Fibo 23.6% of 1.1184/1.0349) to confirm bullish stance and keep in play hopes for stronger correction. Extended recovery will need an extension through 1.0641/43 (May 5 lower top / daily Kijun-sen) and 1.0668 (Fibo 38.2% of 1.1184/1.0349) to generate initial reversal signal. Positive scenario is supported by formation of bullish engulfing pattern on weekly chart and RSI/stochastic indicators emerging from oversold territory. Also, formation of long-legged Doji on monthly chart suggests that larger downtrend might be running out of steam. However, caution is required as geopolitical and economic news remain in play as key risk sentiment drivers and may influence the performance of the pair at any time. Res: 1.0607; 1.0641; 1.0668; 1.0700. Sup: 1.0531; 1.0496; 1.0459; 1.0388. Interested in EUR/USD technicals? Check out the key levels

Risk appetite continued to recover on Thursday, with the US dollar once again giving back some of its recent advances against most major and emerging market currencies. Since the end of last week, the US Dollar Index has fallen by almost 2%. EUR/USD has rebounded back towards the 1.06 level, helped on its way by some hawkish comments from ECB members and heightened expectations that the bank will raise rates by 25 basis points at its July meeting. Sterling has edged back to just shy of the 1.25 mark, while all other G10 currencies have also posted gains against the greenback in the past week. While there has not necessarily been an obvious single catalyst for the rally, we largely attribute the move lower in the dollar to the below: 1) Market takes a breather As tends to be case following a prolonged rally, we may simply be seeing investors unwinding their long positions, and booking profits following the recent sharp move higher in the dollar. 2) China’s COVID-19 headlines improving Macroeconomic data out of China has taken a serious turn for the worst in the past few weeks, but headlines on the covid front have, at least, shown signs of improvement. Shanghai is set to ease its lockdown measures in the coming weeks, as new case numbers in the country fall sharply (down around 80% from the recent peak). 3) Global macroeconomic data holding up well Recent data out of the major economic areas suggests that calls for a sharp slowdown in growth, and possible recessions later in the year, maybe a slight overreaction. The G3 PMIs have remained firmly in expansionary territory (indeed all three are printing above the level of 55). Consumer spending also appears to be holding up well, with activity buoyant despite the recent surge in inflation. We actually think that the global economy will probably hold up slightly better than some economists expect this year. 4) Market has already fully priced in Fed tightening The lack of reaction in the US dollar to the very hawkish comments from FOMC Chair Powell earlier in the week, who said the Fed may have to raise interest rates above the ‘neutral’ level this year, provides further proof that it will be very difficult for the central bank to exceed market expectations this year. There won’t be too much in the way of major market-moving news today, aside from this morning’s UK retail sales figures that will be skewed by the base effect following the removal of lockdown measures in April 2021. A speech from ECB member Lane later in the day may be worth watching, although activity is likely to be largely driven by the factors listed above.

Risk sentiment is wavering as investors are constantly evaluating the likelihood of a recession. The flash PMIs for May might help guide those expectations in the coming week. In the US, there will be plenty of additional drivers for the dollar, such as the FOMC minutes and the PCE inflation readings. Markets remain fixated on seeing peak inflation so any trace of this might help calm nerves. In the world of central banks, the Reserve Bank of New Zealand is expected to hike interest rates again.

Fed minutes – 25/05 – as expected, the Federal Reserve raised rates by 50bps pushing the upper bound of the funds rate to 1%. There had been talk that some on the committee were keen on a 75bps move, however these concerns came to nought with all on the FOMC agreeing to a 50bps hike. The central bank also laid out the start of the balance sheet reduction program starting with $47.5bn in June, rising to $95bn a month after 3 months. This could be construed as being on the dovish side, given that they were starting the program from a lowish base and then ramping up, rather than going for $95bn straight out of the gate. Fed chair Jay Powell also said that based on current data, that the Fed had no intention of going faster than 50bps in a single month, firmly burying any prospect that the Fed would be much more aggressive in subsequent months. He specifically made the point that a 75bps hike wasn’t something the FOMC was actively considering, although in subsequent comments he’s being careful not to rule it out entirely. The discussion over balance sheet reduction is likely to be the more interesting one when it comes to this week’s minutes, particularly the decision to start off with $47.5bn, as opposed to going straight in with $95bn a month reduction.  The slow start to this program suggests that there might be some anxiety over how this might play out in the coming months. Recent comments from ex-Richmond Fed President Jeffrey Lacker suggest the scope for further financial markets volatility, with the Fed potentially being forced to choose between slowing the pace of runoffs in response to market volatility and widening credit spreads or keeping policy tight to fight inflation. The narrative has moved on a bit since then with a number of Fed officials including Chairman Powell coming across as much more hawkish in recent comments, raising the prospect of much more aggressive moves in the weeks and months ahead.  US Q1 GDP – 26/05 – the first iteration of US Q1 GDP was a bit of a shocker. We saw a contraction of -1.4% against an expectation of a 1% expansion, begging the question as to how the markets got it so wrong. A surprise -1.4% contraction in annualised GDP has raised concerns that the US economy could be heading towards a stagflationary style slowdown and possible recession, despite low levels of unemployment. There have been attempts to play down the extent of the slowdown in Q1, with the citing of slower inventory rebuilds after Q4 which saw a significant pull forward for Christmas. Net trade contributed to a -3.2% drag while inventories saw a -0.8% decline, on the back of supply chain disruption. Personal consumption was fairly resilient; however, this will face challenges in the months ahead due to higher prices. No material changes are expected in this week’s adjustment. US Core Deflator (Apr) – 24/05 – the battle to contain the inflation genie appears to have started in earnest, with the Federal Reserve fresh from raising rates by 25bps in March, then followed up with a 50bps rate rise in earlier this month, with the promise of another 50bps move in June and 25bps rate rises subsequently. In some of the more recent CPI numbers there does appear to be some optimism that inflationary pressures are starting to near their peak, although the jury remains out on that. While headline CPI has seen a modest fall to 8.3% in April, producer prices have proved to be slightly more resilient than perhaps Fed officials would like. The only positive is that the strength of the US dollar is likely to act as an anchor on upward inflationary pressure, and this could start to exert some downside pressure on the headline numbers. US PCE Core Deflator rose to 5.2% in March, and is expected to slip back in April to 4.9%.  Germany/France flash PMIs (May) – 17/05 – these flash PMI numbers are rapidly losing credibility in terms of the headline numbers at least, when it comes to assessing the resilience or otherwise of the French, German and UK economies. In terms of the wider economy, it is quite apparent that economic growth is struggling across the bloc as well as here in the UK. Yet to look at the PMI numbers it would be tempting to think that all is well. Nothing could be further from the truth with rising energy prices and supply chain disruptions posing significant challenges to business, large and small. Manufacturing and services PMIs are all expected to slow from the numbers we saw in April all of which were in the mid 50’s for all three of the UK, Germany and France.   Kingfisher Q1 23...

Producer inflation continues to accelerate as it reached a 33.5% y/y in April, setting another record for the indicator. Prices added 2.8% last month after jumping 4.9% during March, continuing to gain strength. Germany is said to have the most substantial fear of inflation of any European country, which is eating into German savings. However, the Bundesbank cannot act alone in tightening policy but can only form a hawkish coalition by bringing the moment of policy tightening closer. And we see some movement in that direction. Increasingly the consensus of the ECB officials is tilting towards a rate hike of 25 points in July. Furthermore, policymakers have not ruled out a further rate increase by 50 points. Whilst this ECB stance is softer than that of the Fed and Euro-region inflation is not inferior to that of the USA. There remains a medium-term pressure factor on the Euro against the Dollar. In the short term, however, the Euro is gathering strength after an oversold year of EURUSD declines with brief stoppages. A rebound in the movement of the last 12 months could correct the EURUSD towards 1.1080, Fibonacci’s 61.8% retracement. However, at 1.08, it might hit the resistance near the previous strong support with the 76.4% retracement level and the 50-day Moving Average.

Summary United States: April Economic Data Show Resilient U.S. Economy U.S. retail sales topped expectations in April, while industrial production also grew more rapidly than economists expected. Data on housing starts, home sales and homebuilder sentiment, however, showed tentative signs of cooling. Next week: New Home Sales (Tue), Durable Goods (Wed), Personal Income & Spending (Fri) International: U.K. and Canada Inflation Reach New Cycle Highs U.K. inflation surged to a fresh 40-year high in April, quickening to 9.0% and placing additional pressure on the Bank of England (BoE) to double down and tighten monetary policy. Inflation in Canada also reached a new high, but this time of "only" 30 years; headline CPI inched up to 6.8% year-over-year in April. Next week: Eurozone PMIs (Tue), U.K. PMIs (Tue), RBNZ Rate Decision (Wed) Interest Rate Watch: Bond Yields Up Significantly in Many Foreign Economies The United States is not the only major economy in which long-term interest rates have risen significantly. For example, the yield on the two-year government bond in Germany has risen about 100 bps since the beginning of the year, while the comparable yield in the United Kingdom is up about 80 bps over the same period. Topic of the Week: The Outlook for Corporate Debt in a Rising Rate Environment After nearly tripling from just over $4T at the turn of the century to about $12T today, non-financial corporate (NFC) debt is at an all-time high. With recent Federal Reserve rate hikes and likely more to come, we outlined some hypothetical scenarios to analyze future debt serviceability in the NFC sector considering rising rates. Download the full report

Equity markets are back in positive territory on Friday but I'm struggling to get too excited by the moves we see going into the weekend. The rebound may partly reflect the scale of the declines we've seen in the previous couple of sessions, while the cut to the five-year loan prime rate in China may also be giving global markets a bit of a lift. But ultimately, very little has changed and I expect that will continue to hold these markets back. The rate cut announced by the PBOC is obviously good news and is clearly targeted a revitalizing the ailing property market which continues to suffer due to the crackdown last year and Covid lockdowns this. Along with other measures already announced, this could help to revive a hugely important part of the economy. Whether it's enough to help China hit its 5.5% growth target this year is another thing. I imagine we may see further stimulus efforts this year in order to try and get close to that as the country is facing numerous headwinds, as every other is around the world right now. What it has that others lack though is room to manoeuvre on both the fiscal and monetary front. UK retail sales are not a true reflection of what's to come The UK is in a very tricky position, regardless of the impression the April retail sales data gave this morning. While spending last month hugely exceeded expectations and was accompanied by a small upward revision in March, we also saw consumer confidence fall to its lowest since records began in 1974. While survey data can be volatile, I expect this is a closer reflection of the squeezed consumer in the UK right now. The cost-of-living crisis is going to have a big impact on household budgets and will intensify again in October when the energy price cap is lifted once more. Unless the government offers more support, the country is heading for double-digit inflation and a recession. Not exactly consistent with sustainable gains in retail sales. Oil flat but risks remain to the upside It's been another volatile week of trade in oil but Brent and WTI are set to end it roughly where they started. They're seeing small gains on the day but price action remains very choppy. There are just so many forces at play at the minute and the increased economic gloom this week and Chinese reopening progress has only added to that. The risks remain tilted to the upside though given the Chinese reopening and continued efforts towards a Russian oil embargo by the EU. And the data this week from OPEC+ was once again disappointing, to say the least. Unless the economy substantially falters immediately, there isn't much of a bearish case for crude currently. Not in any significant way, anyway. Gold buoyed by recession fears The second half of the week has been kind to gold as the trepidation in financial markets has shifted slightly from the pace of monetary tightening to recession risks. So rather than higher yields and a stronger dollar weighing on the yellow metal, we've seen investors pouring into safe havens which have lowered yields slightly and lifted gold. Whether that will be sustained in this hiking environment will be interesting and ultimately depend on just how real and significant the economic fears are. At the end of the day, rate hikes should lower demand but so should a recession. If the latter continues to be viewed as a likely outcome of the former, gold could see its fortunes improve further. Can Bitcoin hold above $30,000? Bitcoin has been treading water for a number of days now around $30,000 which has been interesting given the volatility in other risk assets. That it is being driven by economic rather than interest rate fears may explain it. Less focus on stablecoins may also be helping to contain the bleeding. But while some may be encouraged, it's not seeing any momentum above $30,000 at the minute and the longer that goes on, the more prone it looks to another plunge.

At the end of another choppy week for European markets sentiment appears to have become much more fragile, with the moves being seen in bond yields reflecting concern that we are heading for a growth slowdown. Yesterday’s price action saw a sea of red for markets in Europe with the most pain being felt by the retail sector after this week’s profit warnings from US retail giants Walmart, Target and Kohl’s. US markets have also seen some heavy selling this week, with both the S&P500 and Nasdaq 100 managing to hold above their lows from last week of 3,858 and 11,692, while still finishing the day lower for the second day in succession. Asia markets, on the other hand have seen a strong rebound this morning after China cut its 5-year loan prime rate by 15 basis points, for the second time this year. Consequently, European markets look set to open higher this morning at the end of yet another rollercoaster week for investors. The one silver lining from the selling of the past two days was that we managed to close well off from last week’s lows, suggesting a general reluctance to become too bearish too quickly. That said every single rebound we’ve seen since early April has seen a rebound shallower than the previous one followed by a lower low.   One other thing that has also become clearer this week, has been a notable shift in tone in comments from Fed officials, and appears to indicate rising concern about stickiness in current levels of inflation. Powell’s comments on Wednesday do appear to be softening the market up for the prospect of more aggressive rate moves. As we look ahead to today’s European open, we’ll be looking for a further insight into the damage that a record 9% UK CPI has done to the appetite for UK shoppers to go out and spend money, as the latest Gfk consumer confidence numbers for May fell to a record low of -40 in data released this morning, a truly sobering reflection of how much damage surging inflation is doing to consumer sentiment. After a strong start to the year in January, UK retail sales have seen declines of -0.5% in February and -1.4% in March, battered by rising prices and consumer confidence back at levels last seen in 2008. The march decline of -1.4% was driven by a sharp fall in fuel sales, as the rising cost of living prompted consumers to pare back non-essential spending and drive their cars less. Not only that, but February was also revised lower, from -0.3% to -0.5%. In cutting back on their spending, consumers will also have had one eye on the upcoming surge in energy bills, as well as other price rises, which were due to hit their wallets in April, and saw headline CPI rise to a record 9% in numbers released earlier this week. The most recent BRC retail sales numbers showed that like for like sales fell 1.7% in April, so higher prices are certainly having an effect on spending patterns. On the plus side, the Easter period may see a pickup on spending in travel and leisure as consumers take advantage of the later Easter break, although with the various travel problems, that may not offer the lift it might have done in the past. Expectations are for a fall of -0.3% including fuel sales, however it wouldn’t surprise to see a much bigger decline.   EUR/USD – Appear to be building a base at the 1.0340 area, but we need to see a move through the 1.0650 area to make things interesting and signal a move towards 1.0820. The bias remains for a move lower towards parity, while below 1.0650. GBP/USD – Moved up to the 1.2520 area with an area of support at the 1.2320 area, as well as the recent lows at 1.2150. While below the 1.2630 level the risk remains for a move bac towards 1.2000, on a break below 1.2150. EUR/GBP – Finding a bit of resistance just below the 0.8500 area, with stronger resistance at the 0.8520/30 area. Support remains down near the 0.8420 area.   USD/JPY – Finding support just above the 126.80 area. This is a key support area, with a break below targeting 123.00. As long as 126.80 holds then a move towards the 135.00 area target remains intact. FTSE 100 is expected to open 78 points higher at 7,380. DAX is expected to open 118 points higher at 14,000. CAC40 is expected to open 60 points higher at 6,332.

Outlook: Today we get the usual weekly jobless claims. April existing home sales, the Philly Fed, and for the policy wonks, the ECB policy meeting minutes from the April meeting. The elephant in the room is the S&P down over 4% in the worst rout since June 2020, just when everyone got the message the Covid pandemic was a Big Deal and worthy of the panic that had started a few months before. Ironically, in 2020 the Q1 GDP was down 9.1% and Q2, not yet released when the S&P tanked that time, was a whole lot less bad at -2.9%. The implication is that markets are awfully slow to recognize a serious problem, but that flies in the face of the old attribution of the S&P being a leading indicator of economic health. We say the hysteria yesterday was unwarranted and that will be seen when facts get unspooled. The problem with hysterical panic is that it spreads like wildfire and disregards offsetting information. This is the classic behavior of crowds.  Reuters has a headline “Which earnings to the rescue?” but then the story goes nowhere and doesn’t name anything. So how does a bear market get halted? One silly idea is that some market leaders with deep pockets start acknowledging that the carnage created some buying opportunities. How does this differ from bottom-fishing? The holding period is longer and return-motivated, not knee-jerk opportunistic short-term gain, but we can know that only after some time. All this is supposedly caused by a sudden new acknowledgement of inflation. Poppycock. We have been talking about inflation for over six months. But there might be a tiny push from (of all places) Switzerland. Yesterday Swiss National Bank chief Jordan (such a Swiss name) said “the SNB will take care to maintain price stability” and sees the risk of second-round effects. This got quite a lot of attention because the SNB has been silent so far about inflation, unlike all the others. Gittler at BDWiss points out “Jordan didn’t say what the SNB would do in response, but the last time inflation in Switzerland was this high the policy rate was around 2.75%, not -0.75%, the lowest in recorded history. They could raise rates or they could let the currency appreciate further, which would lower the cost of imported goods, especially energy.” Yikes. Stock Market Rant: The stock market rout was caused by retailers releasing lousy earnings due to inflation—nothing to do with management, mind you. It’s a little unclear how this happens. Had they underpaid for goods sold that now cost more and can be sold for more? In general, retail sales are up. These losers just didn’t have their price of that action. We just had rising retail sales for the 4th month in a row. If sales are up and earnings are down, why do we not blame management? Bloomberg notes that about Target, where this all started, “Yesterday the stock got absolutely clobbered, with its worst one-day loss since 1987. That came a day after Walmart also had its worst day since 1987. But if you read the Target earnings call, you see the issue was not actually some unexpected plunge in consumer demand. The issue they cited over and over again was the speed of the consumption mix, which caught them flat-footed and over-inventoried. “Here's CEO Brian Cornell answering a question about US consumer behavior in the face of high inflation: ‘….. We can tell you what we saw during the quarter and the start of May, where we just continue to see a resilient consumer. Our traffic numbers are up to start the second quarter. They're shopping multiple categories.’” Bloomberg goes on: “Then after the bell yesterday we got Cisco earnings, which sent the stock lower. But it was really all about Chinese supply chain disruptions. Actual demand seems to be robust. Here's Cisco CEO Chuck Robbins: ‘If you combine enterprise and commercial together, we grew 9%, but without the Russia impact, we actually grew 12% and on a trailing 12 months basis it grew 28%. So we are still comfortable with the demand signals that we're seeing and our customers aren't telling us anything differently right now.’" Some retailers took losses in the quarter. Is that really the calamity of the century? No, not in its own right--unless it triggers a wider sense of conditions out of control, which can help send at least some conditions out of control that otherwise would be stable. The WSJ has a nifty piece on the risk of recession not actually priced in yet, even though the pullback is substantial. “One example: Microsoft has dropped from 34 times estimated 12-month forward earnings to 24 times since the start of the year—even as predicted earnings have risen. Something similar has happened...

EUR/USD - 1.0479 Euro's selloff from 1.0563 to 1.0461 in New York yesterday on renewed safe-haven usd's buying due to fall in U.S. yields and U.S. stocks suggests recent corrective upmove from last Friday's fresh 5-year bottom at 1.0350 has ended there and below 1.0438/42 would yield further weakness to 1.0390/00 later. On the upside, only a daily close above 1.0495/00 may risk stronger recovery to 1.0530/40. Data to be released on Thursday: Japan machinery orders, exports, imports, trade balance, Australia employment change, unemployment rate. EU current account, construction orders. U.S. initial jobless claims, continuing jobless claims, Philly Fed manufacturing index, existing home sales, leading index, Canada new housing price index and producer prices.

Shanghai's "freedom day" and JP Morgan's optimism have sparked a relief rally, adverse for the dollar. US data and tough Fed talk on inflation could trigger fresh demand for the greenback. EUR/USD seems especially vulnerable to a shift in the mood.  EUR/USD and other short-term assets are short-term bullish, then bearish. My colleague Tomàs Salles will tackle the technical patterns emerging, and I will focus on the fundamentals.  *Note: This content first appeared as an answer to a Premium user. Sign up and get unfettered access to our analysts and exclusive content. Reasons for the recovery First, China announced that the six-week lockdown in Shanghai will end after the city reported three consecutive days without community infections. The city is the country's largest and the most important one economically. A significant chunk of the recent market gloom came from the downturn in Chinese consumption – and production – due to lockdowns. Any easing is risk-on, adverse for the dollar. The news is different from that on Monday – weak Chinese figures.  The second positive note is also a positive one contradicting a negative one. On Monday, the financial media discussed Lloyd Blankfein's comments that a US recession is a "very high risk." He used to run Goldman Sachs. On "Turnaround Tuesday" the focus is on a note from JP Morgan, another prominent US bank, which said that markets have gone too far in pricing a recession. Once again, this is good for stocks and negative for the dollar. Fear of the Fed to return However, the news from Shanghai does not mean the troubles are over for China, Russia's war in Ukraine continues raging and the Federal Reserve is still tightening. Jerome Powell, Chair of the Fed, will be speaking late in the day and he could remind markets of his aggressive stance – and for good reasons.  Before Powell takes the stage, US Retail Sales figures are set to show consumers continue buying, despite rising prices. Adding to inflationary pressures, the Fed will have received good reasons to increase borrowing costs aggressively, which is positive for the dollar.  EUR/USD as an example EUR/USD has made significant headway, retracing most of the losses from 1.0470 to 1.0350. It may attempt to attack 1.0470, and even move toward 1.0495, the next cap. However, while the 4h-RSI is making its way above 50, momentum remains to the downside and the pair still trades below the 50-SMA, which hits the price at around 1.0490. If EUR/USD fails to break higher, it could turn back down toward 1.0440, 1.0425 and 1.04. As mentioned, My colleague Tomàs Salles will provide deeper technical insights.  Overall, there are good reasons for recovery – but also good reasons to see it as short-lived.