Compass Invest JSC is a leading asset management company, established in 2006 in Sofia. It is licensed by the Bulgarian Financial Supervision Commission (FSC). Compass Invest JSC is owned by Compass Capital JSC. As part of the group, Compass Invest JSC provides asset management services and management of mutual funds.
Last week was marked by inflation data in the US. They coincided with consensus expectations. This immediately eased the pressure and gave way to optimism that 2023 could loosen its grip. The S&P 500 rose, 10-year bond yields fell and the US dollar retreated against a basket of currencies. This is the complete opposite of 2022. Nonetheless, price pressures remain high, but if a similar market condition persists we could see a noticeable easing in the pace of Fed tightening.
Last week's data supports the idea of a pause by the Fed. Expectations are for one 0.25 basis point increase in February and another in March. This would reach the 5% target, where a pause in tightening is very likely.
Markets ended last week in positive territory, a good start to 2023. The factors that determine sentiment remain unchanged. These are inflation, rising interest rates and of course not least geopolitical uncertainty. Against this backdrop, the US employment figures were announced last week. We are currently in a phase where good news can be interpreted as bad news for the market and vice versa. It is because of this feature that equities came under some pressure earlier in the week past data pointing to a steady increase in employment and a reduction in jobless claims, equities then rallied, supported by weak wage growth. Anything that could lead to a pause in rate hikes or a slowdown in inflation will be interpreted positively by the market and vice versa.
