Latest fraudulent alert - last updated on Apr 2023. To find out more information and how to protect yourself, please click here.

Investment Institute
Weekly Market Update

Take Two: Fed eyes more restrictive stance; ECB leaves door open to bigger hikes

  • 11 July 2022 (5 min read)

What do you need to know?

The US Federal Reserve could take a “more restrictive stance” even though higher interest rate increases could have a “larger negative effect on economic activity than anticipated”, minutes of its latest policy meeting showed. The Federal Open Market Committee indicated it would likely vote for a 50 or 75 basis point (bp) rate hike at its meeting this month. Minutes of the European Central Bank’s (ECB) latest meeting showed it expects to raise rates by 25bp in July, leaving the door open for a larger hike in September. Elsewhere, UK Prime Minister Boris Johnson resigned as leader of the Conservative Party, starting the process for a new leadership election.

Around the world

The ECB will gradually decarbonise its corporate bond holdings, as part of plans to further incorporate climate change into its monetary policy operations. It said it would account for climate change in its corporate bond purchases, collateral framework, disclosure requirements and risk management, to “support the green transition of the economy”. It also said the measures would give companies and financial institutions incentives to be more transparent about, and to reduce, their carbon emissions. ECB President Christine Lagarde said the changes show the bank is “turning our commitment to fighting climate change into real action”.

Figure in focus: 78.6%

Turkey’s official inflation rate soared to 78.6% in June, its highest level in 24 years, from 73.5% in May. However, some economists, and critics of President Recep Tayyip Erdoğan’s government, believe the real rate could be almost double that figure, according to reports. Erdoğan’s economic model has focused on cutting interest rates to boost economic growth, pushing up costs in a country that is heavily dependent on imports, while the Turkish lira has also fallen sharply.

Words of wisdom

Sand battery: The use of low-grade sand to store energy and help overcome the intermittency of renewable sources. The first commercial installation of the system has been deployed at a power plant in Finland, using a silo containing about 100 tonnes of builder’s sand which is able to sustain temperatures of up to 500 degrees Celsius once heated. The warm air produced can then be discharged at times of high energy costs or low renewables availability. In its early form, the system is more efficient as a supply of heat, rather than being used to convert that heat back into electricity.

What’s coming up

July’s Eurozone ZEW Economic Sentiment Index arrives on Tuesday, while on Wednesday, the UK’s GDP data for May is published. On the same day updated inflation numbers for Germany, France, Spain and the US land, while the Bank of Canada convenes to decide on interest rates. Thursday sees the US report its four-week average for jobless claims. China announces GDP numbers for the second quarter and the US publishes industrial and manufacturing production numbers for June on Friday.

Related Articles

Weekly Market Update

Take Two: US inflation rises more than expected; ECB hints it may cut rates soon

  • by AXA Investment Managers
  • 15 April 2024 (3 min read)
Weekly Market Update

Take Two: Eurozone inflation eases; Fed wants more data before rate decision

  • by AXA Investment Managers
  • 08 April 2024 (3 min read)
Weekly Market Update

Take Two: US inflation rises; Japan avoids recession as Q4 GDP revised up

  • by AXA Investment Managers
  • 18 March 2024 (3 min read)


    This website is published by AXA Investment Managers Asia Limited (“AXA IM HK”), an entity licensed by the Securities and Futures Commission of Hong Kong (“SFC”), for general circulation and informational purposes only. It does not constitute investment research or financial analysis relating to transactions in financial instruments, nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy, sell or enter into any transactions in respect of any investments, products or services, and should not be considered as solicitation or investment, legal, tax or any other advice, a recommendation for an investment strategy or a personalised recommendation to buy or sell securities under any applicable law or regulation. It has been prepared without taking into account the specific personal circumstances, investment objectives, financial situation, investment knowledge or particular needs of any particular person and may be subject to change at any time without notice. Offering may be made only on the basis of the information disclosed in the relevant offering documents. Please consult independent financial or other professional advisers if you are unsure about any information contained herein.

    Due to its simplification, this publication is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee such opinions, estimates and forecasts made will come to pass. Actual results of operations and achievements may differ materially. Data, figures, declarations, analysis, predictions and other information in this publication is provided based on our state of knowledge at the time of creation of this publication. Information herein may be obtained from sources believed to be reliable. AXA IM HK has reasonable belief that such information is accurate, complete and up-to-date. To the maximum extent permitted by law, AXA IM HK, its affiliates, directors, officers or employees take no responsibility for the data provided by third party, including the accuracy of such data. This material does not contain sufficient information to support an investment decision. References to companies (if any) are for illustrative purposes only and should not be viewed as investment recommendations or solicitations.

    All investment involves risk, including the loss of capital. The value of investments and the income from them can fluctuate and that past performance is no guarantee of future returns, investors may not get back the amount originally invested. Investors should not make any investment decision based on this material alone. 

    Some of the services listed on this Website may not be available for offer to retail investors.

    This Website has not been reviewed by the SFC. © 2023 AXA Investment Managers. All rights reserved.