Hawkish Tones from BoE and Powell, Flash PMI Data Disappoints, Russia in the Spotlight

Macroeconomic/ geopolitical developments

• Further hawkish moves from major central banks were seen last week, as the Bank of England hiked more than expected after core inflation increased sharply.
• The Swiss National Bank also hiked with an indication of further increases to follow.

• Deterioration in the global June Flash PMIs reflect continued economic slowdown, as PMI data for major economies disappointed across the board, particularly in Services.

• A meeting between Chinese President Xi and US Secretary of State Blinken calmed US/China tensions earlier last week, but relations took a negative hit following President Biden referring to President Xi as a dictator.

• Tensions in Russia since Friday and through the weekend have elevated risks across global financial markets.

• Global financial market developments
• The major US stock averages were significantly lower.
• European and Asian indices were also notable lower.
• US and European Bond were in wider consolidation but probing to lower yields amid global slowdown concerns.
• The US Dollar Index bounce from a multi-week low.
• Gold sold off, breaking below and negating the June base.
• Oil stayed in a range but retains a more negative tone with global slowdown concerns.

Key this week

• Geopolitical: Tensions in Russia will need to be monitored and will likely keep risks elevated across global financial markets.
• Central Bank Watch: Central bank governors of the Fed, ECB, BoJ and BoE speak on Wednesday.
• Macroeconomic data: US Consumer Confidence will be watched Tuesday, whilst the Fed’s preferred inflation reading, the Core PCE is released on Friday.

Steve Miley (The Market Chartist)

Editor in chief

Steve Miley is the Market Chartist and has 32 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued