Anasayfa Blog Market Analysis Weekly Market Analysis / 09 May- 13 May 2022

Weekly Market Analysis / 09 May- 13 May 2022

by Buse Kozok
Weekly Market Analysis / 09 May- 13 May 2022

Last week, the US Federal Reserve (Fed) and the Bank of England (BoE) interest rate decisions and non-farm employment data in the US came to the fore in global markets. In its May meeting, the Fed increased the policy rate by 50 basis points, in line with the expectations, to the range of 0.75-1.00%. In addition, it was stated that the Fed balance sheet, which has reached a size of 9 trillion dollars, will be reduced by 47.5 billion dollars per month as of June 1, and it will be reduced by 95 billion dollars per month in the next 3 months. In his speech after the decision, Fed Chairman Powell stated that a 75 basis point rate hike was not something they were actively considering. The Bank of England increased the policy rate by 25 basis points to 1% in line with market expectations. Although the bank does not expect the UK to enter a technical recession, it predicted that the economy will shrink by close to 1% in the last quarter of this year and contract by 0.25% in 2023. Nonfarm payrolls in the US increased by 428,000 in April, above expectations. While the Fed's 50 basis points increase in line with the expectations and limiting the increases to 50 basis points for the upcoming meetings increased the risk appetite in the global markets, hard sales were seen in the global markets with the effect of the news that many central banks took tightening steps together with the Fed. While oil prices started to rise with the statements that the EU could impose an embargo on Russian crude oil, the barrel of Brent oil rose to 114 dollars. While the ounce of gold was priced above $1,900, it fell to $1,850 with hard sales.