Following the FOMC minutes that were released on Wednesday, it is clear that growing stress exists among the central bank members to address inflation using a restrictive monetary policy, but the minutes did not change the current expectations of a potential 0,5%-0,75% interest rate hike in the next meeting in July. Today’s NFPs (Non-farm payrolls) announcement was of significant importance and indicated that the US is still in good condition and will be in better shape (at least short term) regarding the economic slowdown, compared to other economies. In May’s release, the US Bureau of Labor Statistics presented 390K new jobs, which is significantly higher than the consensus expectation for June which was 268K. Moreover, bond yields are again on the rise as the US 10-year approaches 3%.

The Euro faces a bearish trend this week as the US dollar continues to strengthen in this risk-averse environment. Also, the escalating energy crisis and the delays in policy tightening measures by the ECB may increase inflationary pressures across EU countries but no further actions have been announced.

Boris Johnson’s resignation was perceived as a positive result by the markets with the pound achieving a short-term upward movement to $1.20, because it reduced the political risk and uncertainty, however with inflation at the highest level in four decades and the expectation that the BoE will move slower compared to Fed in the tightening of monetary policy the mid to long term bearish trend is still in place.

The major stock indices are bullish this week, while gold is neutral but the oil prices dropped significantly.