July 6, 2022

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Investors focus mainly on US interest rate policy - Wel.nl

Investors focus mainly on US interest rate policy – Wel.nl

Amsterdam (Reuters) – Investors will focus mainly on the US Federal Reserve’s umbrella policy meeting for the coming stock market week. In fact, as Federal Reserve Chairman Jerome Powell has already noted, it is already certain that interest rates will rise further. But given that inflation in the US was 8.6 per cent in May, the central bank may announce drastic measures to control it. Additional information on this may be announced in a week.

US inflation is at its highest level in more than 40 years. This is due to the high cost of fuel due to the Ukraine war. Like Europe, Americans are struggling at record prices at the pump. Food prices have also gone up, causing many American households to see their purchasing power declining. Meanwhile, consumer confidence in the US economy has plummeted to its lowest level. According to President Joe Biden, tackling inflation is a top priority of his administration.

European and US stock markets closed slightly lower after inflation figures were released on Friday. The AEX index lost 2.5 percent in Amsterdam. Stock markets in Frankfurt, London and Paris fell 3.1 percent. There were also strong minuses on the plates in New York.

Eurozone

In the euro zone, interest rates remain unchanged. The European Central Bank (ECB) said last week that it would raise interest rates in July to combat inflation. This will be the first rate hike in the euro area since 2011. New European inflation figures will be released on Friday. Bank of England will decide interest rates this week. The central bank’s interest rate decision is also on Japan’s agenda.

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The program also includes various macroeconomic statistics. Statistics on industrial production are being released from Germany, the Netherlands’ most important trading partner. The new ZEW code will also be released. It contains the expectations of investors and analysts for the German economy.

Data on bankruptcies, international trade, unemployment and home consumption will be followed from the Netherlands during the week. Earlier in the week, the British would present unilateral changes to Northern Ireland’s Brexit agreements.