Weekly summary Inflation brings back interest rate cuts

Dear Reader,

An exciting week in finance is coming to an end, full of important events from around the world.

Last Friday, a hot nonfarm payrolls report highlighted a solid U.S. economy, initially dashing hopes for interest rate cuts. However, on Wednesday, CPI inflation data changed the other way, again raising hopes for interest rate cuts. The FOMC meeting confirmed this view, even though the Fed kept interest rates steady. Rate cuts typically improve the business environment by lowering the price of borrowing and encouraging spending, which is why the event sent U.S. stocks to all-time highs. Therefore, the near future will be interesting. Time will tell if it will be able to compete with the European Football Championship, but last week’s US data was certainly dramatic.

In Europe, parliamentary elections moved to the right but barely moved financial markets. Meanwhile, the Bank of Japan kept interest rates unchanged at its meeting.

Strong earnings

Adobe led the week in strong earnings reports, while Broadcom and Oracle also surprised positively. Next week won’t be full of major earnings reports, with IT company Accenture being the most noteworthy company to report on Thursday before the US market opens.

Looking to the future

While many Europeans will focus on the European Football Championships, markets will have something to watch. The valid German key number ZEW will not be available on Monday. The UK will publish CPI inflation data on Wednesday, mirroring the US data that captured the market’s attention last week. There will also be a meeting of the Bank of England on Thursday.

PMI data will be released on Friday, providing information from supply chain managers on market conditions. In this case, it is expected that the most interesting data will be from the USA. These numbers are always interesting from a market point of view.

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We wish you a successful week on the financial markets and beyond.