It was a mixed bag for markets this week, as end of the week losses erased early week gains. Despite a volatile week for many key markets, the S&P 500 ended the week by closing 1% up on the day.
The President of the European Central Bank (ECB), Christine Lagarde, laid out the central bank’s plans for a 0.25% rate hike in July, setting market expectations.
Towards the end of the week, Eurozone inflation was released at 8.6%, driven by food and energy costs. Alongside the release of CPI (the measure that dominates the headlines), you can find core CPI – a measure of inflation which excludes food, alcohol, tobacco and energy. This reading came in below expectations and below last month, at 3.7%.
Given that this is a measure that isn’t targeted by the ECB when assessing monetary policy, markets often don’t pay much attention to it. However, it still tells us some vital information. The decrease in the reading is a sign that some of the pressures that have built up behind inflation are beginning to ease.