Weekly Market Analysis / 23 May 27 May 2022

Last week, the UK and Eurozone inflation data, US industrial production, and Fed Chairman Powell's statements came to the fore in global markets. In the UK, consumer prices increased by 2.5% monthly in April, while annual inflation reached the peak of 40 years at 9%. Consumer prices increased by 0.6% monthly and 7.4% annually in April in the euro area. The Eurozone, which contracted in the first quarter of 2021 with the base effect after the loss in the pandemic and grew by 2.2% in the second and third quarters, grew by 0.3% in the last quarter. Industrial production in the USA increased by 1.1% in April. While the decrease in capacity constraints related to labor and raw materials is effective in the increase in industrial production, high inflation and increasing interest rates continue to pose risks for production. Fed Chairman Powell stated that they will continue to tighten monetary policy until inflation falls and that they will need to consider moving more aggressively unless they see clear and convincing evidence that inflation is falling. The hawkish statements from the Fed reduced the risk appetite in the markets. Gold fell as low as $1,786 an ounce on Monday. It followed a horizontal course on the following days of the week.