Market Pulse - July 2022

Key themes

  • Stocks and bonds rallied in July as a perceived policy pivot from the US Federal Reserve (Fed) led markets to lower interest rate expectations, pricing in interest rate cuts in early 2023.
  • The US Fed and European Central Bank (ECB) delivered 0.75% and 0.50% interest rate hikes respectively as they sought to bring inflation back to their 2% targets.
  • The euro fell below parity against the US dollar intra-month as risks to the eurozone economy were heightened by an ongoing weaponisation of Russian energy supplies and political uncertainty in Italy.

 

Markets snapshot

  • The MSCI AC World equity index rose 7.1% (9.7% in euros).
  • European equities rose 7.0% (8.0% in euros).
  • UK equities underperformed, rising 3.5% (6.4% in euros); energy and commodity stocks were relatively weak as oil and commodity prices fell over the month.
  • Japan rose 4.0% (8.4% in euros) as weakness in the Japanese yen supported equity markets.
  • The Pacific Basin rose 2.8% (6.5% in euros) as concerns over Chinese growth weighed on the region.
  • The Eurozone >5-year bond index rose 5.9% as yields fell on intensifying growth fears and comments from the US Fed on potentially slowing the pace of rate hikes.
  • The euro fell -2.5% against the dollar to 1.022 as risks to the eurozone economy were heightened by an ongoing weaponisation of Russian energy supplies and political uncertainty in Italy.
  • Commodities were flat (2.5% in euros), bringing their year-to-date return to 35.7% (51.4% in euros).
  • Crude oil was down -6.8% amid slowing global growth.
  • European gas rose 32.1% as Russia cut supplies via Nord Stream 1.
  • Gold fell -2.4% as risk appetite returned to markets following a perceived policy pivot by the US Fed.

Latest

Insights

Latest Weekly Market Review

ILIM Weekly Market Review - Week 37 2022

Each week, our Retail Investment Manager, Cian O'Mahony, looks at the main stories in the Irish and global investment markets.

Read more Download

Insights

Market Pulse

Market Pulse - August 2022

Each month, Lenny McLoughlin, Investment Strategist sifts through market noise to pinpoint the key themes that have influenced markets – and impacted your investments. Lenny also shares his insights on the forces shaping markets in the short-to-medium term.

Read more Download
See all insights