Home Blog Market Analysis Weekly market analysis 10- 15 June 2024

Weekly market analysis 10- 15 June 2024

by Buse Kozok
Weekly market analysis 10- 15 June 2024

Last week, Eurozone growth and US non-agricultural employment data as well as the European Central Bank's interest rate decision came to the fore in global markets.

The Eurozone economy grew by 0.3% in the first quarter of the year compared to the previous quarter and by 0.4% compared to the same quarter of the previous year. In its meeting held yesterday, the European Central Bank (ECB) reduced interest rates by 25 basis points, in line with expectations, and reduced the refinancing interest rate to 4.25%, the deposit interest rate to 3.75% and the marginal funding interest rate to 4.50%. While this was recorded as the first reduction since March 2016 for both refinancing interest and marginal funding interest, it was the first reduction for deposit interest since September 2019. In the statement, it was stated that the Bank will continue to reinvest all due principal payments of securities purchased within the scope of the Pandemic Emergency Asset Purchase Program (PEPP) until the end of this month, and that reinvestments will be completely stopped at the end of this year. While the ECB increased its inflation forecast for 2024 by 0.2 points to 2.5%, and by 0.2 points to 2.2% for 2025, it left the expectation for 2026 at 1.9%. At the press conference held after the interest rate decision, ECB President Christine Lagarde stated that the latest inflation forecasts have been revised upwards for 2024 and 2025, that they will keep interest rates limited enough and that they will determine the tightening process with the decisions they will take from meeting to meeting. Non-farm employment in the USA increased by 272 thousand people in May, above the expectation of an increase of 180 thousand people. The unemployment rate increased by 0.1 point to 4.0% in May. Average hourly earnings increased by 0.4% monthly and 4.08% annually. Global markets followed a mixed course throughout the week.

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