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At the close of the stock market on Friday, the Dow Jones Index (US30) increased by 1.06% (-1.38% for the week) and the S&P 500 Index (US500) added 1.05% (-2.43% for the week). The Technology Index Nasdaq (US100) gained 0.90% (-4.57% for the week). All three indices were down by the end of the week.

The US ISM manufacturing index decreased to 54.5 from 56.1. Despite the decline, the indicator is above 50 and above analysts' expectations. But the overall manufacturing PMI fell to its lowest level since July 2020 amid stagnant factory production and falling new orders. The manufacturing sector is a drag on GDP, and analysts believe this resistance will increase through the summer.

The global economic outlook will continue to deteriorate, and analysts now expect gross domestic product (GDP) growth to be well below potential in 2023. Inflation will show no sign of slowing soon, and central banks will continue aggressively tightening monetary policy. Tighter monetary policy means slower growth, and financial markets are increasingly concerned that higher rates will lead to a recession sooner or later. A recession is not inevitable, but its probability has increased in recent months. One problem for central banks is that many forces pushing prices up are beyond their control. Supply chain disruptions remain a problem as the world struggles to reboot itself after stoppages due to the pandemic. Rising commodity prices, caused by supply disruptions and the war in Ukraine, have also stoked the fire.

Stock markets in Europe traded higher on Friday. German DAX (DE30) gained 0.23% (-3.06% for the week), French CAC 40 (FR40) added 0.14% (-2.85% for the week), Spanish IBEX 35 (ES35) jumped by 0.96% (-1.08% for the week), British FTSE 100 (UK100) was down by 0.01% (-0.56% for the week).

Inflation in the Eurozone hit another record high in June, while industrial production in the bloc fell for the first time in two years. Consumer prices in the region hit another record 8.6% year-over-year in June, down from 8.1% in May. Price pressures intensified significantly in the first half of 2022, and there are no signs of rapid easing. The European Central Bank is expected to raise interest rates this month for the first time in a decade, although economists disagree on the extent of the increase.

The US has a high probability of hurricanes off the Gulf Coast in the coming weeks. Any storm could have a devastating impact on energy infrastructure. The inability of OPEC+ to produce the volume that consumer countries need, sanctions on Russia, and the low level of the US shale industry this year are putting upward pressure on oil prices. "You can't afford to lose a single barrel this summer. That's the reality," said the founding partner of New York-based energy hedge fund Again Capital. "You also may not want to lose a single billion cubic feet of gas," he added.

Asian markets traded lower last week. Japan's Nikkei 225 (JP225) decreased by 3.01% for the week, Hong Kong's Hang Seng (HK50) lost 0.62% for the week, and Australia's S&P/ASX 200 (AU200) was down by 0.43% for the week.

Australia's manufacturing index (PMI) increased by 1.6 points to 54.0 in June, indicating moderate growth. The report indicates that while pressure on prices continues to grow, Australia's manufacturing sector expanded in June with a strong increase in production and new orders and a slight increase in employment.

Australia will also ban imports of Russian gold. Speaking at a press conference in the Ukrainian capital with President Vladimir Zelensky, Anthony Albanese said Australia would impose sanctions and a travel ban on 16 more Russian ministers and oligarchs, bringing the total number of Russians under Australian sanctions to 843.

At the commodities market the biggest gains over the week showed the futures on lumber (+10.2%), palladium (+4.43%) and orange juice (+4.31%). Futures on natural gas (-10.2%), corn (-9.26%), silver (-6.01%), cocoa (-5.72%), gasoline (-5.58%), copper (-3.41%), and platinum (-2.91%) showed the biggest drop.

• S&P 500 (F) (US500) 3,825.33 +39.95 (+1.06%)
• Dow Jones (US30) 31,097.26 +321.83 (+1.05%)
• DAX (DE40) 13,118.13 +205.54 (+1.59%)
• FTSE 100 (UK100) 7,168.65 −0.63 (−0.01%)
• USD Index 105.12 +0.44 (+0.42%)
   

Important events for today:

• Switzerland Consumer Price Index (m/m) at 09:30 (GMT+3);
• Bank of Canada Business Outlook Survey (m/m) at 17:30 (GMT+3).