Undoubtedly, the FOMC meeting was the most important point in the last week’s economic calendar. In line with the market consensus, the council did not make any changes in the monetary policy. The bank’s statement was much more important issue for investors. According to the document, the reduction of the Fed’s balance would soon start, however, the FOMC paid special attention to the lowering inflation during the last meeting as well. The Federal Reserve is the only hawkish central bank among those the major ones, whereas this aspect has seemed to be discounted, so the market has focused on less dovish rumors from the ECB.

The meeting of the ECB Governing Council was the most important event of the past week. Although the body did not make any changes in the monetary policy, the conference with Mario Draghi aroused a lot of market emotions. The head of the bank probably wanted his speech to be neutral. On the one hand, he said that there were plenty of positive signals from the European economy, but on the other he confirmed the ECB readiness to continue QE. Nevertheless, Mario Draghi acknowledged that the future of QE would be discussed in the autumn as well. These words were interpreted as hawkish ones by the market. Thus euro appreciated against dollar by 1.7% last week.

A publication of the Beige Book and a public appearance of Janet Yellen were the most important events of the past week. The speech put some uncertainty in the market. The president of the Fed confirmed plans to reduce the balance sheet of the Federal Reserve, albeit she seemed to be very cautious about further interest rates raises, as well as some other representatives of the Fed. Meanwhile, there were some rumors that Mario Draghi would announce a reduction of QE during an upcoming symposium in Jackson Hole or after a September’s ECB Governing Council meeting. Thus the market sentiment supported euro last week, especially since a hawkish attitude of the Fed had been already discounted.

The first week of July brought slight increases of major global stock market indices. During the whole past week, German DAX and French CAC40 went up by 0.5%, while British FTSE250 soared by 0.3%. In the US, the DJI rose by 0.3%, the NASDAQ took off by 0.2% and the S&P500 grew by 0.1%. It should be reiterated that the first days of the new month were extremely interesting in the financial markets. Investors learnt a lot of robust macroeconomic figures from the Euroland and the US. Special attention should be paid to the readings from the US, because lately, they had run of bad luck. This time investors learnt the services PMI and ISM indices which exceeded projections. The manufacturing PMI was 0.1 percentage point lower than consensus.

The last week of June was not successful for the stock markets. During the whole past week, German DAX deteriorated by 3.2%, French CAC40 fell by 2.8% and British FTSE250 went down by 1.8%. In the US, the NASDAQ declined by 2%, the S&P500 decreased by 0.6% and the DJI shrank by 0.2%. This time special attention should be paid to the latest macroeconomic data releases. The readings from the US economy ended run of bad luck and surprised investors positively. The revision of the annualized GDP growth rate stood at 1.4% vs 1.2% expected. In addition, the Chicago PMI significantly exceeded the market consensus – 65.7 pts. vs 58 pts..