19th June 2023
Perspective News, The Cambridge Weekly
The Cambridge Weekly – 19th June 2023
Market conundrum amid volatile growth
Last week saw equity markets move higher yet, despite central bank hawkishness. We had another 0.25% rate rise from the European Central Bank (ECB) and, although the US Federal Open Market Committee (FOMC) left rates unchanged, they gave us strong hints of at least another 0.25% hike in July. They also indicated their expectation for rates to stay higher for longer than many think.
Oil prices took another step down in the early part of last week. Brent crude, the international oil benchmark, dropped to just $71 per barrel (pb) during Monday trading. Tuesday and Wednesday saw a slight recovery but, at the time of writing, prices are still below where they were the previous week. This is a continuation of the bear market since mid-April, as global growth pessimism and disappointments have filtered through into markets’ expected energy demands. In truth, though, crude prices have been on a downward trend for a year. After a peak of more than $110pb in June 2022, oil demand has severely weakened and prices have consistently fallen, only occasionally punctuated by sputtering short-term relief rallies.