Last week, the market focused on the FOMC meeting. As expected, the council raised the interest rates by 25 basis points, so investors paid special attention to the Fed’s message and a conference with Janet Yellen. These turned out to be hawkish. The FOMC is going to make one more interest rates hike by the end of this year and next three in 2018. In addition, the Fed presented a very precise program to reduce its balance sheet. After all, the scale of the dollar’s appreciation was negligible – it was quite surprising, especially since the ECB maintained a dovish attitude. Furthermore, despite the Fed’s assurances that the US economic slowdown has been only temporary, a series of weak macroeconomic data readings from the US is going on.

Undoubtedly, the last Thursday was the most important day of the past week – the market focused on a decision of the ECB, or rather on a conference with Mario Draghi, on the parliamentary elections in the UK and on Donald Trump’s political problems. In line with the market expectations, the Governing Council of the ECB left interest rates unchanged. Nevertheless, the message of the bank was rather dovish, so the market was toned down, because plenty of investors expected some hawkish statements. Meanwhile, in the UK, the party of Theresa May won the parliamentary elections, whereas it lost its majority in the House of Commons. These results should be considered as a failure of the Theresa May’s idea. A lot of concerns on further Brexit’s procedure appeared in the market, but they only adversely affected pound quotations.

This time the issue of the political risk in the US remained in the background or the market got used to unpredictable Donald Trump. Thus, investors focused on the macroeconomic data readings and the policy of the most important central banks. According to the speeches of the FOMC members, the Fed has wanted to maintain announced pace of the monetary tightening – two more interest rates raises by the end of this year. However, these words had been said before the publication of the payrolls which once again failed. The unemployment rate shrank to 4.3%, whereas the non – farm payrolls stood at 138K vs 185K projected. Of course this does not mean that the Fed will resign from a June interest rates hike, but a series of weaker data from the American economy has been going on - this may be a warning signal.

A correction in major global stock markets started in May (it is said sell in May and go away). It cannot be ruled out if this month ends, the correction will finish. So far, this has not been seen in the European stock market indices, whose changes were inconsiderable and without any clear direction (the DAX went down by 0.3% and the CAC40 grew by 0.2%). This picture has suited to the WIG20 as well - a confirmation that the index of the largest Polish companies is driven by the foreign capital and correlated with major European stock markets. It should be noted that PKO BP showed good financial results, albeit those of PGNiG were much more better.

After a period of smooth trade and low volatility in the global financial markets, politics again aroused a lot of emotions. Donald Trump who reportedly abused his power and disclosed state secrets was in the spotlight. The information not only had a negative impact on the image of the US president, but it may also be the source of subsequent disputes and divisions in Congress. This has been a significant risk factor for the market, as the issue of the Donald Trump’s economic reforms implementation has seemed increasingly questionable. Therefore, it was not a surprise that major global stock market indices ended the last week in negative territory. During the whole week, the NASDAQ fell by 0.6%, the DJI and the S&P500 went down by 0.4%.