Global markets rise as concerns over inflation ebb

ANKARA

Global markets on Monday started the week positively as concerns over inflation ebbed in global markets.

Risk appetite increased after the US Federal Reserve (Fed) announced its meeting minutes last week, which included the determination to keep raising interest rates until there is evidence that inflation is falling.

Consumer spending in April rose 0.9%, and the increase in inflation slowed.

Meanwhile, China said lockdown restrictions will be eased in Shanghai as of June due to a fall in COVID-19 cases, a move to stimulate the country’s faltering economy. This supported the stock markets.

Announcement of macroeconomic data this week is critical as investors will receive signals about how flexible the Fed can act in interest rate hikes.

In this context, the meeting of Fed Chairman Jerome Powell with US President Joe Biden will be followed, as well as the report on non-farm employment in the US and the Beige Book.

Analysts say the Fed will start shrinking its balance sheet this week and said that the activity in the bond market should be monitored.

Inflation figures in Eurozone and Germany will be released next.

Meanwhile, the EU failed to agree Sunday on a fresh package of sanctions against Russia.

The 27 EU heads of state and government are meeting on Monday to discuss the latest developments in Ukraine, and the bloc’s efforts to help the country further, i.e. providing an additional €9 billion ($9.6 billion) in macro-financial assistance to cover its immediate liquidity needs.

Russia, on the contrary, found a way to pay its Eurobond debt that would sidestep the western financial infrastructure, Finance Minister Anton Siluanov told Vedomosti, a Russian-language business daily newspaper.

Foreign investors can open accounts in Russian banks in both rubles and hard currency, Siluanov said.