Since the banking problems in the US emerged in March, share prices have risen and expectations for future key interest rates have fallen significantly. However, inflation dynamics remain the most important factor for the markets, but unfortunately also one that is difficult to assess.
The current crisis of confidence continues to dominate market activity and has significantly increased uncertainty about the future development of economic indicators. Read more in the current market commentary by Chief Economist Gerhard Winzer.
Last week, positive economic data brought back some confidence. The global purchasing managers’ index, one of the most important survey-based economic reports, rose for the third time in a row. On the other hand, the latest inflation reports dampen hopes of a rapid decline in inflation without additional key rate hikes.
Inflation, which remains too high, continues to be the dominant macroeconomic issue. Hopes that inflation will fall as quickly as it has risen have been dampened, as Chief Economist Gerhard Winzer explains in his market commentary.
One year after the start of the Russian war of aggression on Ukraine, the economic impact is felt around the globe. Naturally, the economic damage in Ukraine itself is devastating.
Central banks and markets are in a calibration phase. The question is how many key rate hikes are needed to be able to confidently expect inflation to fall in the direction of 2%. Particular attention is therefore once again being paid to the US inflation data, which will be published today, Tuesday.
On the stock markets, the first month of the year was positive. The recent softer tones of the central banks give rise to hopes that interest rate hikes are slowly coming to an end. Read more about the current market assessment in our Investment Update.
Improved growth prospects for China and Europe and hopes of a sustained decline in inflation have supported the markets since the beginning of the year. However, sharp central bank rhetoric and weak growth indicators in the USA could prove to be spoilers.
At present, indicators on inflation and economic activity are competing to determine which of the two categories is more important for the financial market. Read more in the current market commentary by Chief Economist Gerhard Winzer.
As an investor, you will come across several parties or institutions in the fund selection and securities account opening process.
