● USD traded higher last week as the Fed raised interest rates by 50 basis points as was widely expected and marked the largest rate hike in 22 years.
● The Bank of England raised interest rates by 1% to their highest level since the financial crisis and warned the economy is on course to shrink under pressure from double-digit inflation.
● INR was under pressure amid rate hikes all across the board, RBI too has raised policy repo rate by 40 bps to 4.4% with focus on withdrawal of accommodative stance.
● The Fed also started quantitative tightening in order to trim its balance sheet which grew to $9 trillion through the pandemic.
● US initial jobless claims rose by more than expected last week to 200,000, up from 180,000 the previous week.
● The U.S. has created 428,000 nonfarm jobs in April which is more than expected, bringing the labour force back ever closer to its pre-pandemic level.
● The unemployment rate stayed at 3.6%, against the expectation for a drop to 3.5%, while there were also tentative signs of wage pressures starting to ease.
● Average hourly earnings rose only 0.3% on the month, less than expectation of 0.4%. In annual terms, wages continued to grow at a rate of 5.5%, unchanged from March.
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