As you can see from the accompanying table, with long weekends in both the US and UK, it was a bit of a nothing week.
The main theme of the week was again inflation.
Despite news that OPEC, (Organization of the Petroleum Exporting Countries), would increase output by nearly 650,000 barrels a day (up from an initial plan of 400,000), the price of a barrel of oil continued to rise after the EU announced plans to ban seaborne imports of Russian oil, coupled with news that China was easing its coronavirus lockdowns.
As we have previously explained, higher energy prices have been the biggest contributor to the current inflationary pressures – and therefore ideally we would like to see a weaker oil price. Furthermore, this week’s oil price increase again makes us question how effective central bank tightening will be at taming inflation.
And on the subject of monetary tightening, today’s (Friday 3 June 2022), US employment data was one of those economic releases where good news is bad news, as US employers recruited 390,000 workers in May. This was 72,000 more than economists expected – and as such, we would speculate that this will make Fed policymakers more inclined to aggressively increase US interest rates.