Weekly recap 27-1 June/July 2022

USA

The lack of investor confidence returned this week, which caused some of the previous week’s gains to be lost. Many fear that it may be difficult for the Federal Reserve to find the balance point in the monetary policy that they currently use to fight inflation. If the balance is not found, the possibility of the US entering a recession grows.

This lack of confidence also came from several indicators that fell short of expectations. Some show a decrease in consumer purchases, reinforcing the idea that the American economy may indeed be slowing down.

Europe

European stock markets reflected the same downward movement as the US. The problems remain the same, inflation, which continues to show no great signs of slowing down and reached 8.6% in June, and the proximity to the geopolitical conflict.

Although some ECB members are in favor of a 0.50% hike in the reference interest rate, Christine Lagarde reinforces that the ECB’s monetary policy plan is to remain in place. As planned, it will be a 0.25% hike, possibly in July, and if necessary another similar hike in September.

Asia

Certain external policies such as interest rate hikes by Central Banks are starting to give cause for concern for investors in Japan. Consumption and production data showed some decline and caused a lower risk appetite.

China had another positive week, unlike most of the world. An increase in production, thanks to reduced containment measures allowed many factories to return to 100% production. Reduced regulatory scrutiny and more support for the economy appear to be another reason for this positive period in China.

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