The markets last week were mostly dominated by politics.

The big news of the week was that the United States administration announced to pull out of the 2015 Iran nuclear deal.

Oil prices surged ahead of the announcement which came on Tuesday in a widely expected move.

President Trump announced that he would impose fresh and stricter sanctions against Iran.

Oil prices jumped after the announcement, reaching a fresh two and half year high with expectations that the oil markets could see further cut in production.

German factory orders ease. Eurozone Sentix investor confidence weakens

Factory orders in Germany were seen to be weakening as official data from Destatis showed that factory orders fell 0.9% on the month marking a third month of decline.

The data showed continued weakness in recovery in the Eurozone’s largest economy following a solid finish to last year.

Data showed that factory orders fell 0.9% on a month over month basis in March.

This was bigger than the revised 0.2% decline in February. Economists’ polled were expecting to see factory orders rise 0.5%.

Excluding major orders, the new orders report showed a 0.1% decline in March.

This pushed the annual growth in factory orders to rise slightly from 3.0% to 3.1% in March.

Economists’ polled were forecasting factory orders to rise 5% on the year in March.

Manufacturing turnover was seen rising 0.4% on the month following a 2.4% decline in February.

In a separate report, the Eurozone’s Sentix investor confidence fell in May marking a third straight month of decline.

The investor sentiment index was seen falling to 19.2 in May compared to 19.6 in April.

The current situation index was seen easing from 43.0 a month ago to 42.8 in May.

The investor confidence index for Germany also eased to 23.5 compared to 24.4 in April.

U.S. Consumer prices rise at a slower pace

Consumer prices in the United States were seen rising at a much slower pace than expected.

Official data showed that headline CPI increased 0.2% on the month.

This comes after the data for March was revised to show a 0.1% increase.

Core CPI, which excludes the volatile food and energy prices was seen rising 0.1% on the month compared to a 0.2% increase in the month before.

Despite the weaker than expected pace of growth in the inflation data, on an annual basis consumer prices were seen firming.

The annual headline inflation rate rose 2.5% on the year breaching past the Fed’s 2% inflation target.

Core CPI was seen firming 2.1% on an annual basis on the year.

This was slightly below the median forecasts of a 2.2% increase on the core CPI.

The increase in consumer prices in the month of April came about on higher shelter and gas prices.

Gas prices were seen rising 1.4% in April while shelter prices rose 0.4%.

Other factors that pushed inflation lower were weaker automobile prices which fell 1.6% in the month in April.

This was the strongest monthly declin since March 2009. Price of airfares fell 2.7%.

Bank of England leaves interest rates unchanged

The Bank of England held its monetary policy meeting last week on Thursday.

As widely expected by economists, the central bank left the interest rates unchanged at 0.50% with a 5 – 2 vote.

The two dissenting votes came from well known hawks, Ian McCafferty and Michaeal Saunders.

Both members voted for a 25 basis point rate hike. However, the policymakers agreed that the central bank needs to assess more incoming data before hiking rates.

The BoE Governor Mark Carney gave a cautious outlook as he said that the first quarter data was weak.

However, Carney was also optimistic noting that the UK’s economy might have increased better than the initial estimates.

In a few weeks time, the UK’s Office for national statistics (ONS) will be releasing a second revised GDP estimate for the three months ending March 2018.

The BoE officials also gave upgraded forecasts. According to the new economic forecasts, the UK’s GDP is expected to average around 1.4% in 2018.

This was a downward revision compared to the 1.8% increase that was initially forecast in February.

The central bank also expects inflation to remain at the current levels for the most part of this year before easing back to just above the 2% inflation target by the Bank of England.

The BoE expects to hike rates one more time this year. Markets expect this to happen sometime in August.