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Weekly Market Wrap 27/05/2022

The World Economic Forum met in Davos this week where discussions around the impact of high inflation and the ongoing energy crisis on global growth took place; the meeting was dominated by talk of Russia’s invasion of Ukraine. Ukraine’s President Zelenskyy addressed the forum on the opening day, where he called on governments to stop purchasing Russian energy sources and businesses to cut ties with Russia. Geopolitical tensions remained high during US President Joe Biden’s visit to Japan where he warned that the US would take military action if China was to attempt to invade Taiwan. FOMC minutes gave markets some much needed clarity on the Fed’s next moves, whilst the UK Government began tackling the cost-of-living crisis that has gripped the nation. The European Union could start the process of banning Russian oil imports at the leaders meeting in Brussels next week. 

US Markets 

The S&P 500 is likely to end the week up 5.73%% at 4,125 whilst the NASDAQ is up 6.24% at 12,575. US markets gained this week breaking a seven-week losing streak. FOMC minutes released on Wednesday revealed to markets that a large number of members were in agreement that 0.50% rate hikes would “likely be appropriate” at the Fed’s next two meetings in June and July. Markets rallied upon hearing this news, as the update somewhat calmed fears that a potential larger rate hikes in future meetings catching investors off guard. US consumer spending increased in April by 0.9%, ahead of the consensus 0.7% and calming fears of an impending economic slowdown in the US. 

UK Market  

The UK market performed well this week. The UK Chancellor Rishi Sunak attempted to ease the cost-of-living crisis in the UK by announcing a new package worth more than £15 billion that will aim to help families. Every UK household will receive an energy bill discount of £400, with those households most in need receiving an additional payment of £650 to provide some relief from the UK’s cost of living crisis. This scheme will be partially funded by a new temporary windfall tax on oil & gas companies whilst prices are at significantly increased levels. However, this support provided by the government is not expected to make a dent in the high levels of inflation that are present in the UK.  

European Markets  

The Euro Stoxx 50 gain 3.93% at 3,800, the DAX closed up 3.21% at 14,430 whilst the CAC 40 was down 3.59% to 6,511. The European Union has stepped up the pursuit of a ban on imports of Russian oil, however, is set to allow oil to be delivered to Hungary from Russia by pipeline until an alternative source can be found. The agreement could be approved early next week at the EU leaders’ summit. President of the European Central Bank Cristine Lagarde hinted that the ECB would look to raise rates for the first time since the pandemic in July and expects to end asset purchases “early in the third quarter” of 2022. 

Fixed Income  

Yields on the US 10-Year Treasury fell this week by 0.07% to 2.71%, reaching the lowest level in a month after this week’s FOMC minutes calmed fears that rate hikes could get more aggressive in coming meetings. 


Brent Crude rose by 4.58% to $117 per barrel this week. OPEC+ commented earlier this week that there would be only a slight increase in production in July, a period when demand is expected to rise rapidly due to increased travel over the summer. With US oil reserves declining, it looks as though the oil market could remain under supplied for an extended period.  

The Week Ahead  

Monday – EU Leaders Summit & EU Consumer Confidence 

Tuesday – US Consumer Confidence  

Wednesday – EU Unemployment, US PMI 

Thursday – US Initial Jobless Claims, OPEC Meeting 

Friday – US Nonfarm Payrolls, EU Retail Sales 

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