The week kick-started with hopeful investors maintaining a strong hold on the stock market indices. The main chatter centered around the speculated U.S inflation figures and how they could possibly induce summer interest rate cuts.
Economic data received razor-sharp attention as the week progressed. The Federal Reserve meeting built suspense around potential interest rate adjustments, and investors keenly observed Wall Street for signs of shifts that could drastically tweak their investment strategies.
The dollar market seemed relatively at ease, despite looming threats of potential foreign exchange intervention from Japanese officials. These threats heightened stress on the U.S currency, but the yen remained strong, staying close to a 32-year low.
In the backdrop of the increasing tensions in the Middle East and ongoing assaults on energy facilities due to the Russia-Ukraine conflict, global crude oil prices went up. This hike is straining economies worldwide, and putting intense pressure on countries heavily reliant on oil imports such as China and India, where inflation rates are soaring and currencies are weakening.
The MSCI All Country stock index reported a minor drop of 0.1% whereas Wall Street continued to build upon its record-breaking levels from the previous week. Uncertainties surrounding China’s intervention in the tech industry resulted in mixed reactions in the Asian markets.
Inflation fears shape investment strategies
The NASDAQ witnessed some fluctuations due to underperformance by tech giants but managed a slight rebound by week-end. The FTSE 100 recorded a marginal upward movement, while Frankfurt’s DAX tended downwards in an otherwise bullish global market.
The much-awaited U.S. core personal consumption expenditure (PCE) price index will be released on Friday. Analysts predict a 0.3% increase for February, maintaining the yearly rate at 2.8%. However, higher figures might upset the chances of a U.S. Federal Reserve rate cut in June. If the data disappoints, the pressure could rise on the Federal Reserve to cut interest rates sooner.
European markets are bracing for their inflation assessments, anticipating consumer price data from France, Italy, Belgium, and Spain, ahead of the comprehensive EU CPI report due on April 3. Simultaneously, the central bank of Sweden is preparing for a decisive meeting on Wednesday. The majority predict no change in the 4.0% rates, but some expect a dovish announcement in light of the surprising softening by the Swiss National Bank last week.
