Market Update

It was a week of mixed results for the markets, with early-week gains wiped out by losses towards the end of the week. Despite the volatility in many key markets, the S&P 500 managed to close the week with a 1% gain.
The President of the European Central Bank (ECB), Christine Lagarde, outlined the central bank's intentions to implement a 0.25% rate hike in July, aligning with market expectations.
Towards the week's end, Eurozone inflation figures were released, showing a rate of 8.6%, primarily driven by increases in food and energy costs. In addition to the widely reported Consumer Price Index (CPI), which often dominates headlines, there is also a measure known as core CPI. This measure of inflation excludes items like food, alcohol, tobacco, and energy. The core CPI reading came in below expectations and lower than the previous month, at 3.7%.
While the ECB does not typically focus on core CPI when making monetary policy decisions, it still provides valuable insights. The decrease in this reading indicates that some of the inflationary pressures are starting to ease.
The Eurozone manufacturing Purchasing Managers' Index (PMI) was also released, showing a slight increase compared to the previous month. It exceeded expectations and entered expansionary territory with a reading of 52.1.
In other news, due to the surge in natural gas prices caused by reduced Russian gas supply through Nord Stream 1, German energy company Uniper announced that it is in discussions with German officials about a potential bailout. Uniper, which operates in Germany and the UK, including power stations like Connah's Quay Power Station and Ratcliffe-on-Soar coal Power Station, is seeking assistance after being unable to pass on these increased costs to consumers. It's important to note that Germany heavily relies on Russian gas, consuming nearly half of its gas supply from Russia, making it one of the most dependent countries in the developed western world. In response to energy requirements in the short-term, Germany has previously announced plans to utilize idled coal-fired power stations.
Looking ahead to next week, we anticipate the release of the minutes from the last US Federal Reserve policy meeting. While we know that they raised rates by 0.75% at this meeting, the minutes will provide further insights into their discussions and decision-making process.
Additionally, keep an eye out for other data releases, including Eurozone retail sales, US, UK, and Eurozone services PMI figures, US employment data, and Chinese Consumer Price Index (CPI) readings.