Global stocks were mixed last week. US equities were higher, Europe and UK markets were flat to slightly lower, and Asia was generally higher.
This week is an important one for data. The latest Fed interest rate decision will be announced on Wednesday and before that, on Tuesday, the US CPI inflation data will be released so there is some uncertainty over what the Fed will do. Consensus opinion says the Fed will skip a hike this month (but raise again in July) – this view somewhat was encouraged by US Initial Jobless Claims data last week which jumped unexpectedly to its highest level since October 2021.
The Bank of Canada (BoC) and Reserve Bank of Australia (RBA) both surprised markets last week by raising their rates by 0.25%. The consensus opinion was that they would both hold off. It seems that central banks do not necessarily concur with the markets’ opinion that we are done with tightening.
The European Central Bank will also be announcing it’s latest rate decision on Thursday – the market is expecting a further 0.25% increase and another in July.
GBPUSD traded up to almost 1.26 earlier today (Monday) but has backed off. The recent high set in May was 1.2679, the highest level since April last year. The Bank of England is expected to raise its lending rate to 4.75% next week.
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