Providing you with a short summary of events from around the world. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

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 109 | 12th September, 2022

UK COMMENTARY

  • The UK economy expanded 0.2% in July, according to the Office for National Statistics (ONS). This was lower than expected, with growth driven by the customer-facing services sector, which includes sports and recreation.
  • Britain’s benchmark borrowing costs hit their highest level in over eight years. The yield, or interest rate, on 10-year UK governments bonds jumped to 3.08%, a level last seen in early 2014. Yields rise when bond prices fall and there has been a rapid sell-off of gilts in recent weeks, as new Prime Minister Liz Truss outlined her plans for tax cuts.
  • The S&P Global/CIPS UK Purchasing Managers Index (PMI) for the construction sector fell for the second consecutive month in August, posting a figure of 49.2 after July’s 48.9. New order growth, which measures the value and volume of new orders for construction work, was at its weakest since June 2020.

NORTH AMERICA COMMENTARY

  • The stress in US job markets eased as the economy created 315k new jobs in August, according to the Labor Department. The labour force participation rate rose to its highest level since March, and overtime hours declined.

EUROPE COMMENTARY

  • The European Central Bank’s (ECB) governing council voted to raise all three key interest rates by 0.75% percentage points – the largest increase in the ECB’s recent history, but in line with other recent central bank increases.
  • This brings the ECB’s ‘main refinancing rate’ up from 0.5% to 1.25%, while the ‘marginal lending rate’ paid by banks borrowing from the ECB goes up to 1.25%. The deposit facility (paid on bank deposits) rises from 0% to 0.75% (it was negative until late July, when the ECB started raising rates).
  • Germany’s industrial production fell 0.3% in July, compared to a 0.8% rise in June, according to data released by its statistical authority Destatis, suggesting high energy prices are leaving their mark on German industry. 

GLOBAL COMMENTARY

  • The oil cartel, Opec+ group and its allies, including Russia, agreed to support oil prices by cutting output by 100,000 barrels per day in October. The move came in response to Brent crude dropping below $100/barrel in August, on fears that major economies falling into recession would weaken demand for energy.

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