Blackfinch Group
Monday Market Update
The ever-changing world we live in reinforces the importance
of regular up-to-date communication. This weekly news update from our
multi-asset portfolio managers provides you with a summary of global events
for your reference and to share with clients.
Issue 120 | 28th November, 2022
UK COMMENTARY
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The volume of house sales increased by 2% month-on-month, on a seasonally-adjusted basis, according to HM Revenue and Customs figures. An estimated 108,480 sales took place, which was also 38% higher than in October 2021 - when a stamp duty holiday in England and Northern Ireland ended.
- The average five-year fixed mortgage rate has dropped below 6% for the first time since the market turmoil created by the disastrous mini-budget two months ago. Moneyfacts reported last week that the typical five-year fixed deal costs 5.95% per year, the lowest in seven weeks. That’s down from 6.5% a month ago, but still higher than before the mini-budget, when average 5-year and 2-year rates were both around 4.75%.
- The price that the UK government will have to pay to support households with their energy bills is set to increase from January. Regulator Ofgem has lifted its energy price cap, which would have meant households faced average bills of £4,279 from the start of 2023, up from £3,549. However, the government’s support package means average bills will be £2,500 from last month, and rise to £3,000 from April.
- The headline seasonally adjusted S&P Global / CIPS flash UK composite output index – which measures private sector business activity – ticked up to 48.3 in November, from 48.2 in October and signalling a further modest fall. The index has been below the crucial parity mark of 50, that separates contraction from expansion, for four months.
NORTH AMERICA COMMENTARY
- The headline flash US PMI composite output index from S&P Global fell to 46.3 in November, from 48.2 at the start of the fourth quarter. The rate of contraction signalled was the sharpest since August and among the quickest since 2009.
EUROPE COMMENTARY
- In Germany, the IFO Institute’s business climate index has risen to 86.3, up from 84.5 in October. Although that’s a low level, it shows the outlook has improved after an unexpected economic growth of 0.4% in the third quarter.
- Business activity declined across the Eurozone for a fifth month running in November but at a slower pace, according to flash PMI data from S&P Global. The headline index rose to 47.8 from 47.3 in October, inching closer to the 50 parity mark.
- Business activity in the French private sector shrank for the first time since February 2021. The headline flash France PMI composite output index fell below the 50.0 threshold in November to 48.8, from 50.2 in October.
EMERGING MARKETS
- Protests spread across China, from Beijing to Xinjiang and Shanghai, reflecting rising anger about the country’s strict zero-Covid policy. Meaning a sustained recovery in demand across the vast country appears even further away than first thought.
- Turkey’s central bank has cut interest rates again to 9%, from 10.5%, despite inflation soaring over 80%. The Central Bank of the Republic of Turkey continues to bow to pressure from president Recep Tayyip Erdoğan.
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