The three things you need to know this week: Estimates of Global Growth Lowered, U.S. Budget Deal Sit-Rep, a Possible Populist Wave at the EU Parliamentary Elections.
Global Growth: The OECD lowered its 2019 global growth forecast again in May, to 3.2% from 3.3%, following a March downgrade. Forecasts for the U.S. and EZ were raised amid a better-than-expected start to the year, while growth estimates for Japan and Canada were lowered. The latest economic outlook cautioned the global economy will remain tenuous in the next few years as trade conflicts, policy uncertainty, financial market risks and China continue to weigh on the direction of growth and markets.
Budget Deal Close?: Administration officials and congressional leaders are reportedly close to agreement on a two-year budget deal that would address the debt ceiling and lessen the chance of a government shutdown later in the year. Senate Majority Leader Mitch McConnell made some upbeat comments on reaching an agreement, but resolution is still needed on how much domestic spending will be part of the deal and whether new spending should be funded by additional revenues or other budget cuts.
EU Parliament Elections: Elections will take place from May 23-26 across the 28-member states, including the U.K., with a total of 751 representatives elected in proportion to member population. The elections will determine the balance of power within the EU and who will lead the European Commission and other top jobs, including the next head of the ECB. Recent polling data shows pro-European parties are expected to obtain a majority above 60%, while populist parties support could rise from 20% to more than 30%.