From the data that the ONS released last week in the UK, we learnt that inflation, despite the Government’s wishes and claims, is still sticky, with services sticking around three times the BoE’s target level with the ongoing conflict in the Middle East damaging supply chains and looking potentially set to worsen the outlook for prices to stop rising looks bleak. Adding petrol to the flames of inflation is the increase in wages in the UK and annual hikes in such prices as state pensions and mobile phone bills.

Christine Lagarde didn’t disappoint the doves on the ECB when she gave the strongest hint possible that there will be a cut in interest rates for the Eurozone in June. This marks a change from Fed dependence to divergence by the ECB and of course comes with risks. After another stronger than expected CPI number in the States, the tenth in a row, expectations on the start of the Fed rate cutting cycle moved further out in the year and the predicted number of cuts continued to fall.

The phrase more questions than answers rather neatly sums up the current financial markets, with US data being the fulcrum of the conundrum. As if to underscore the issue, Jolts were subtly disappointing, as one analyst said, whilst last Friday's Non-Farm Payrolls beat all expectations. Fed officials are equally contradictory, but less and later, with regard to interest rate cuts, it seems to be the overriding message.

The plethora of central bank meetings last week at least delivered one cut in interest rates. The Swiss National Bank was the surprise outlier as it edged its rates lower by .25%, the first central bank to do so. It possibly jumped the gun as it holds quarterly meetings, and if it hadn’t moved now, it would have had to wait until June, which they perceived as being too long and now its odds on another cut then.

The markets received a couple of shocks last week from hotter-than-expected inflation data in the US. The prices data may cause a recalibration in the dot plot and higher US 10-year yields, but so far, it has done nothing to dampen the enthusiasm of the S&P 500 fans.

It's been a month since the ONE team descended on ICE London 2024 with the event bearing fruit in three notable areas: New ventures, Relationship nurturing and In-person trend analysis.

The dollar eased back markedly last week, mainly in response to Chairman Powell's testimony to Congress, which was widely perceived as dovish. As always, with a speech from a central banker, the words are open to interpretation, and the temptation is always to hear what you want to hear, which the markets duly did. The general message from Powell was one of caution and to wait and see what the data brings with regards to inflation and data, which brings us neatly to last Friday's Non-Farm Payroll figures, which, despite a strong headline, did show signs of weakness.

The last seven days have witnessed a significant milestone in global equity markets, as major indices like the DOW, S&P 500, DAX, CAC, and even Nikkei all reached new record highs. The wind in the equity market’s sails can largely be accredited to positivity surrounding artificial intelligence and the broader tech sector.

Minutes from the European Central Bank's most recent interest rate decision were released on Thursday and showed a surprising resilience in holding interest rates high despite the economic weakness seen in many parts of the continent. ECB officials signalled they needed to wait at least until the end of Q1 and would need to see consistently declining inflation, slower wage growth and a modest economic recovery in order for them to lower interest rates.

Another week ended with the markets facing more questions than answers. The UK appears to have good employment and retail sales whilst in a recession, with wages growing almost uncomfortably fast. When taken as a whole, the economic picture looks increasingly like one of stagflation. It also doesn't look like Prime Minister Sunak will get the improving economic conditions he was hoping for and will probably be forced to push the election back as far as it can go, possibly until December.