Market Commentary | The week that was

On Friday, June 3rd, a better-than-expected US employment report pointed to a tight labour market that could keep the Federal Reserve Bank (FED) on an aggressive path of interest rate hikes. The FED has raised interest rates by 0.75% this year, with more increases expected in an attempt to contain record high inflation numbers. In May a further 390,000 jobs were created by the US economy: higher than the expected 325,000.

Inflation remains a worrying theme globally. “Record inflation in the euro zone is seen fuelling the European Central Bank’s tightening debate at this coming week’s policy meeting, where officials are expected to end asset purchases and lay the ground for an interest-rate lift-off next month, reported Bloomberg (6 June 2022)

The cryptocurrency, bitcoin, continued its downward trajectory as the world’s largest digital currency slipped below the $30,000 level. Speculative assets, which benefitted from the easy-money era, came under pressure as central banks from around the world started to implement quantitative tightening.

The week ahead is expected to be very busy. Among the host of economic releases are the local Q1 Current Account and Trade Balance on Thursday, and on Friday the US Consumer Price Index (CPI) for May (NB).