Global markets in perspective.
Last week, the UK’s newly appointed Chancellor of the Exchequer, Kwasi Kwarteng, delivered a controversial mini budget, citing tax breaks as a key pillar. While the UK government is trying to relieve the economic burden felt by consumers, markets did not take kindly to this move.
It was a busy week for central banks, with no fewer than 13 central banks meeting and the majority adopting a hawkish stance in the face of global price rises.
With more negative surprises than positive, inflation forecasting has been a tough job in 2022. This week, the United States (US) Bureau of Labour Statistics reported worse than expected inflation numbers for August, which sent markets into a tailspin.
The United States (US) has committed to supply a staggering $5.6 billion in aid and arms to Ukraine to support the country in its defence against Russia. On Thursday the US government also approved up to $675 million in additional aid to Ukraine.
The Economic Sentiment indicator in the Euro Area fell to 97.6 in August, from a downwardly revised 98.9 in July, and slightly below market forecasts of 98.
Gas supply in the European region has been a topic of discussion since the start of the Russia-Ukraine war.
With the world in disarray, it is an opportune time to take stock of all the different elements at play. This week we take you through some of the current key focal points for the financial markets.
While US inflation remains elevated, and well above the 2% target set by the Fed, the market was pleasantly surprised by a lower-than-expected annual rise in consumer prices during July.
Just as global risk appetite started to improve, geopolitical tension flared up again. This time between China and the United States (US).
A notable change this week was the tone of the Fed on interest rate hikes. Over the past few months, we have all become accustomed to the hawkish tone of the Fed and its message that interest rates will be hiked as much, and as quickly, as needed to fight inflation.
The ECB took centre stage on Thursday, as investors anxiously awaited its interest rate decision. With inflation at record-high levels, markets had been anticipating a hike.