Indices

In the US, the Dow Jones increased by 1.75 %, while the S&P 500 and Nasdaq 100 rose by 1.9% and 2.68% respectively. This was due to a decrease in Treasury yields and investor confidence in the monetary policy path after Federal Reserve officials’ speeches. The market sentiment was further improved after Atlanta Fed President Raphael Bostic stated that he expects the central bank to raise rates by another quarter percentage point later this month.

European stocks climbed as concerns about interest rates were put aside, and investors turned their attention to positive indicators for an improving economic outlook. The pan-European STOXX Europe 600 Index increased by 1.43% in local currency terms, with major stock indexes also experiencing gains. Germany’s DAX Index rose by 2.42%, while the UK’s FTSE 100 increased by 0.87%.

Forex

Significant gains of the Euro during last week was affected mostly by the hawkish stance of ECB Lagarde to increase interest rates to bring down inflation as data that came in were slightly worse than expected. However, as the week approached the end, the US Dollar gained a larger part back and concluded the week on the Euro side by 0.82%.

The Canadian dollar in correlation with Crude oil gained against the dollar during the week, however, at the end of it, most of the gains were also given back to the US Dollar which closed -0.12%.

Macro

• The monthly change in Durable Goods Orders released in the USA at the beginning of the week has brought worries about the economical situation as the numbers (-4.5% Actual) were worse than what was expected by analysts (-4% Consensus). The decline in economic activity in terms of durable goods orders was also confirmed by the CB Consumer Confidence released on Tuesday with 102.9 points as Actual while Consensus was 108.5 points.
• Both ISM, as well as the S&P Purchasing Managers Index, which on a side note, measures the overall economic health of manufacturing activity, have indicated economic contraction. The number released by ISM was 47.7 as Actual in contrast with 48.0 as forecasted. The S&P numbers were 47.3 as Actual and were forecasted at 47.8. On the other hand, PMI for the services sector came out much brighter than manufacturing with 50.6 as actual and 50.5 as forecasted (S&P), and 55.1 as actual against 54.5 as forecasted (ISM).
• Preliminary inflation reported in Germany, one of the biggest economies in the Eurozone, was 8.7% actual in contrast with 8.5% which was forecasted. In the Eurozone, the preliminary inflation rate was reported to be 8.5%. Unemployment, on the other hand, stagnated at 6.7% to the previous release.
• The working week concluded with PPI in the Eurozone being at 15% yearly and -2.8% monthly change. PMI data from S&P Global services composite in the UK and Eurozone was signaling an expansion.