Skip to main content

What happened last week?

Europe, Middle East, and Africa

  • The European Central Bank cut interest rates for the first time since 2019.
  • OPEC+ extended its oil supply curbs, while also detailing a plan to bring some production back online.


  • Indian stocks were whipsawed by election surprises.

    Why It Matters

    In a widely telegraphed move, the European Central Bank deliveredits first interest rate cut in nearly five years, moving faster than its US and UK counterparts in lowering borrowing costs after the biggest inflation surge in a generation. The move took the bloc’s benchmark deposit rate to 3.75%, down from a record high of 4%. But the Bank stopped short of indicating that more rate cuts would soon follow, which is understandable considering it also lifted its inflation forecasts for this year and next by 0.2 percentage points each.

    OPEC+ has announced several production cuts and extensions to these cuts since 2022, in an effort to prop up oil prices.And at its latest biannual meeting last week, the cartel agreed to further extend those cuts – in some cases to the end of 2025 – while also outlining a plan to bring some oil production back online later this year. 

    That was earlier than some traders expected, sending oil prices lower last week.

    The Nifty 50 – India’s benchmark stock index – rallied 3.3% on Monday to a record high, with exit polls forecasting a landslide election win for Prime Minister Narendra Modi, whose third term promised investors a continuation of infrastructure-led economic growth and market-friendly reforms. But the rally proved very short-lived, with the Nifty 50 tumbling 5.9% on Tuesday – its worst day in more than four years – as poll tallies showed Modi’s party losing its parliamentary majority in the world’s most populous country.

    This week’s focus: It’s Not Over Till It’s Over

    A lot will come into view for US investors this week, with May’s inflation figures set to be released on Wednesday and the Federal Reserve (the Fed) set to deliver its next interest rate announcement later that same day.

    April’s round of inflation numbers showed consumer prices were cooler than expected, by the slimmest of margins, which was a big relief to investors after four straight months of hot surprises. Economists expect May’s inflation report to show the overall pace of price gains held flat at 3.4%, while the core measure, which strips out volatile food and energy items, dipped slightly to 3.5%.

    And that would mark a tiny step in the right direction, but it wouldn’t shift the fundamental problem: the fact that last year’s inflation-cooling momentum has all but stalled, partly because of a rock-solid labor market that’s powering some strong consumer spending – despite higher prices and borrowing costs.

    That explains why the Fed might be wary about its next move. The central bank, which has been battling the nation’s hot inflation with a series of interest rate hikes, has said that it wants to see price pressures crumble once and for all before it begins lowering the country’s lofty borrowing costs. So with inflation still far above the Fed’s 2% target and falling at only a snail’s pace, traders see virtually no chance of a rate cut this Wednesday. Instead, they expect the first reduction in September, followed by another in December. But if May’s inflation report shows prices heating up again, traders will end up dialing back those bets, which could send stock and bond prices tumbling.

    • Monday: China loan growth (May), eurozone economic sentiment (June).
    • Tuesday: UK labor market report (May). Earnings: Oracle.
    • Wednesday: Fed interest rate announcement, China inflation (May), UK economic growth (April), US inflation (May). Earnings: Broadcom.
    • Thursday: Eurozone industrial production (April), US producer prices (May). Earnings: Adobe.
    • Friday: Bank of Japan interest rate announcement, eurozone trade balance (April), US consumer sentiment (June).

      This document is provided to you for your information and discussion purposes only. It is not a solicitation for business or an offer to buy or sell any security or other financial instrument. Any information including facts, opinions, or quotations, may be condensed or summarised and are expressed as of the date of writing. The information may change without notice and Trusted Novus Bank (“TNB”) is under no obligation to ensure that such updates are brought to your attention. Past performance is not a guide to future performance.

      This document has been prepared by TNB from sources TNB believes to be reliable but TNB does not guarantee its accuracy or completeness and does not accept liability for any loss arising from its use. TNB reserves the right to remedy any errors that may be present in this document.

      Trusted Novus is registered in Gibraltar under number 3207. Its registered address and principal place of business is: Trusted Novus Bank Limited, 76 Main Street, Gibraltar GX11 1AA. It is regulated by the Gibraltar Financial Services Commission (Permission Number 3207) to provide Banking and Investment Services. TNB is a member of the Gibraltar Deposit Guarantee Board ( and the Gibraltar Investor Compensation Scheme (