Global equity markets ended in the negative territory last week, following hawkish comments from the central bank officials across the world signalling for an interest rate hike in their respective countries. UK markets ended lower last week. In economic news, UK’s GfK consumer confidence slumped to its lowest level in 11 months in June, led down by increasing inflation and weakness in wage growth. European markets painted a negative picture last week, weighed down by utility sector shares. On the macro front, Eurozone’s preliminary consumer price inflation advanced less-than-expected on an annual basis in June. Moreover, the region's consumer confidence index rose at par with the market forecast in the same month. US markets ended weaker for the week, amid a sell-off in technology sector stocks. On the data front, US durable goods orders declined more-than-expected to its lowest level in 6 months in May. Moreover, pending home sales unexpectedly declined on a monthly basis in the same month. Asian markets ended the week on a stronger footing. Data indicated that Japan’s national consumer price index advanced less-than-anticipated on an annual basis in May, whereas, China’s NBS manufacturing PMI recorded a surprise rise in June while non-manufacturing PMI expanded in the same month.
Currency Update

The EUR ended stronger against the USD, supported by the Eurozone’s economic sentiment indicator which climbed to its highest level since August 2007 in June. Adding to the positive sentiment, business climate indicator advanced more than market forecast in the same month, its strongest rise since April 2011. Additionally, Germany’s flash annual consumer price index recorded a more-than-anticipated rise in June. The GBP ended in the positive territory against the USD, after the Bank of England (BoE) Governor, Mark Carney, signaled towards the necessity for an interest rate increase. The USD ended weaker against its major peers, after Senate Majority Leader, Mitch McConnell, delayed a vote on health care legislation until after the July 4th recess due to shrinking support from his party’s members. Data revealed that US initial jobless claims unexpectedly advanced for the week ended 23 June 2017.
BoE Governor, Mark Carney:
Interest rate hike necessary…

The BoE Governor, Mark Carney, stated that it will become “necessary” to increase interest rates if the business in the UK raise investments and wages, shrugging off the Brexit uncertainty while suggested that the central bank will debate on the same "in the coming months". He also hinted at the possibility of removal of some monetary stimulus in the economy. Separately, the central bank, citing rapidly increasing consumer credit and smooth lending conditions in the mortgage markets, ordered banks to keep aside an additional £11.4 billion to cover risk of bad debt boom. Furthermore, the BoE warned that Brexit could have serious consequences on the British economy.
The Week Ahead

Going ahead this week, investors’ will keep a tab on the BoE Governor, Mark Carney’s speech and FOMC meeting minutes for further cues. The US employment report and UK’s NIESR gross domestic product estimate along with manufacturing PMI data across the world will be on investors’ radar.
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