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Weekly Market Wrap 22/04/2022

The conflict between Russia and Ukraine is far from over after the announcement that Russia intends to seize all of southern and eastern Ukraine emerged on Friday. Russia claimed to have “liberated” the Ukrainian city of Mariupol as it begun its second phase of the invasion. The UK, US, and Europe are all now poised to increase interest rates in order to fight levels of inflation that are well above central bank targets. Jerome Powell confirmed that a 0.50% hike “is on the table” for the May meeting whilst the Bank of England’s Catherine Mann said that further rate hikes are probably needed. Markets are also pricing in interest rate rises for the European Central Bank in 2022 after hawkish comments from a number of key ECB policymakers. Investors will also keep a close eye on the results of Sunday’s French election, where the incumbent Macron is expected to retain the presidency despite a late challenge. 

UK consumer confidence fell to its second lowest level ever recorded as the cost-of-living crisis continues to put pressure on UK households. UK retail sales data also showed a fall, as the outlook for the UK economy remains uncertain. Investors will also keep a close eye on the results of Sunday’s French election, where the incumbent Macron is expected to retain the presidency despite a late challenge. 

US Markets 

The S&P 500 ended the week down 0.37% 4,377 with the tech heavy NASDAQ falling by 1.40% to 13,166. US stocks fell on Thursday on the news of a potential increase in the pace of raising rates. Federal Reserve Chairman Jerome Powell hinted at the possibility of a 0.50% rate hike in the Fed’s May meeting whilst predictions of large hikes in June and July emerged. US earnings season has provided mixed results, with airlines showing strong demand as consumers resume flying after the Omicron variant had caused increased restrictions. Netflix suffered a single day loss of over 35% after showing a loss of subscribers and increasing costs of new content for its platform whilst losing ground to its closest competitors.   

UK Market  

The FTSE 100 lost 0.64%, falling to 7,567. A recent survey has shown that UK consumer confidence is at its lowest level since the 2008 financial crisis. 30-year high levels of inflation, as well as increasing national insurance and rising interest rates have destroyed consumer’s confidence in the economy and is likely to impact spending seen in the near future. Simultaneously UK retail sales released data on Friday showing a 1.4% drop in sales in March, increasing concerns of future stagflation in the UK 

European Markets  

The Euro Stoxx 50 ended the week up 0.38% at 3,864, the DAX gained 0.82% to 14,279 and the CAC 40 was up 0.38%, ending the week at 6,614. Despite a positive start to the week, European markets suffered on Friday as Russia claimed control of the Ukrainian city of Mariupol, which has become the biggest city to be taken by Russia during the invasion. France is suffering from added political risk as an upset in Sunday’s election from far-right candidate Le Pen could cause significant issues for French government debt as well as the Euro.  

Fixed Income  

The US 10-Year Treasury yield has risen 0.12%, reaching 2.92% after Federal Reserve Chairman Jerome Powell delivered hawkish commentary, telling investors that a 0.50% rate hike “will be on the table” in the Fed’s May meeting. Markets currently expect the Fed’s funds rate to reach 2.75% – 3.00% by the end of 2022 as the Fed looks to battle persistent high levels of inflation in the US. 


Brent Crude lost 4.49% this week, falling to $106 per barrel. China’s continued zero Covid policy and subsequent lockdowns have reduced demand for oil significantly. The recent downgrades in forecasts for global growth in 2022 and 2023 have also dampened the outlook for oil demand. However, the possibility of the EU banning Russian oil imports, which could cause a supply shock is still present.  

Gold prices fell 1.14% to $1,946 as rising yields on US Treasury bonds and a strong US Dollar made Gold look less appealing as a non-income yielding asset. 


The Week Ahead  

Monday – UK House Price Index 

Tuesday – US Durable Goods Orders 

Wednesday – Australia CPI, Japan Retail Sales 

Thursday – BoJ Interest Rate Decision, US GDP + Initial Jobless Claims 

Friday – Eurozone GDP, US PMI 

*Price changes as of last week’s close unless stated otherwise.