Weekly recap 20-24 June 2022

USA

Although there were no significant economic improvements, certain signs that inflation may be slowing were well received by investors. The major indexes all saw good gains throughout the week.

A slowdown in the number of home sales and a reduction in raw material inflation were two of the main factors. Although there is inflation in prices, there has been a reduction in that increase. This shows that the Fed is succeeding in its more aggressive monetary policy. If this continues it could be an indicator that the Fed will raise its key interest rate by just 0.50% at the next meeting.

Europe

A similar move happened in Europe. Most European indices showed gains as doubt grew that there is a reduction in the European Central Bank’s monetary policy aggressiveness. However, one indicator that measures consumer confidence has dropped considerably, which shows fears of a possible recession.

The UK continues to suffer from rising inflation. Data from last week shows a record high of 9.1%. This has also led to a drastic reduction in consumption, it remains to be seen whether it will actually have any effect on reducing inflation in the coming months.

Asia

Japan continues on the opposite trend as the rest of the major central banks. Investors had a positive week thanks to the confidence that the Bank of Japan will continue its monetary policy that offers further support to the economy. Despite the fact that there is an increase in inflation, it is still in line with forecasts.

China seems to be following the same path as Japan. The stock market has received quite well the promise that the Chinese government will inject more capital to support the economy. Certain data show that there has been a slowdown in the real estate sector, which raises some doubts about the health of this sector.

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