Coffee Break

Coffee Break:
  • Week

Last week in a nutshell

  • H1 2022 ended on a sour note: it was the stock market’s worst first-half since 1970. The trigger is a combination of unexpected shocks: rampant inflation, sharp monetary tightening, a new Covid-19 outbreak in China and the war in Ukraine.
  • In the US, consumer confidence took a hit and fell to a 16-month low as consumers expect weaker economic growth in the second half of the year.
  • In the Euro Zone, consumer price inflation reached 8.6%, a new record high in June. This is the last reading before the expected first ECB rate hike since 2011, later this month.
  • As China partially relaxed its Covid-19 containment measures, the manufacturing sector paused thanks to alleviated pricing pressures, a boost to exports and a shortening of supplier delivery times.

What’s next?

  • Final June PMI for key countries are due for publication. In the US, last week’s Manufacturing ISM data revealed shrinking orders as consumer spending is slowing down and inventories are piling up.
  • Amid recession fears and persistent inflation pressures, the US job report will give insight into the robustness of the labour market. In view of the weekly initial jobless claims since the month of March, a softening is expected.
  • The US Federal Reserve Bank and the European Central Bank are due to publish meeting minutes giving insight into the magnitude and pace of rate hikes amid the challenging context of tightening in an economic slowdown , credit spreads are widening and stock prices are falling.
  • The expected softening in the Euro Area retail sales should give details on the evolution of consumption as rising prices started to weigh on consumers' affordability and confidence.

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