Home Blog Market Analysis Weekly Market Analysis / 20 June- 24 June 2022

Weekly Market Analysis / 20 June- 24 June 2022

by Buse Kozok
Weekly Market Analysis /  20 June- 24 June 2022

Last week, global markets were busy with data flow. We followed that inflation data and Central Bank decisions came to the fore. While annual inflation in Germany was 7.9% in May, annual inflation in the Eurozone peaked at 8.1% due to the rise in energy prices. On Wednesday, the US Federal Reserve (Fed) increased the policy rate by 75 basis points to 1.50-1.75%, in line with the expectations. While emphasizing that it has a strong commitment to return to the 2% inflation target, it was stated in the Fed resolution text that there will be no change in the Fed's balance sheet reduction plan and that it will continue to reduce Treasury bonds and mortgage-backed securities. On Thursday, the Bank of England (BoE) raised the policy rate by 25 basis points to 1.25%. Thus, the Bank increased the interest rate for the fifth time, raising the policy rate to the highest level of the last 13 years. In a statement together with the rate decision, BoE stated that they increased interest rates due to strong price pressures, tightness in the labor market and the risk of pressures becoming more persistent, and gave the message that they are ready to act "strongly" to control inflation if necessary. This morning, the Bank of Japan kept the policy rate unchanged at minus 0.1%, despite the Fed's tightening cycle and pressure from the yen. After the Fed's strongest interest rate hike since 1994, the fears of recession and the tightening action of many central banks with the Fed led to sharp sales in global markets. While oil prices started to rise with OPEC's statement that global oil production decreased by 150.000 barrels a day in May compared to the previous month, to approximately 98 million 750 thousand barrels, Brent oil rose above the 125 limit during the week.
Ounce Gold side still continues to be priced within the descending price channel. The yellow metal, which declined rapidly before the FED, regressed to the support of €1.809, which it previously held in mid-May, but managed to hold here again.

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