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 116 | 31st October, 2022

UK COMMENTARY

  • UK business activity contracted for a third month in a row in October, reaching its lowest level since January 2021, according to the S&P Global/CIPS flash UK composite output Purchasing Managers’ Index (PMI). This gave a reading of 47.2 compared to 49.1 in September.
  • British manufacturing confidence dropped at the fastest pace since the first COVID-19 lockdown, according to a poll by the Confederation of British Industry (CBI).
  • The survey showed 48% of big manufacturers were pessimistic about the economy, compared to 21% in the last survey in July. The last time optimism fell so low, aside from the depths of pandemic lockdowns, was during the global financial crisis of 2008-09.
  • The Office for National Statistics (ONS) reported that lowest-priced items increased in cost by around 17% over the 12 months to September 2022. This was an increase from 7% over the 12 months to April 2022. The prices of low-cost ranges of vegetable oil and pasta have risen more than 60% in the last year, according to data that tracks the impact of inflation on shoppers.

NORTH AMERICA COMMENTARY

  • The US economy expanded at an annual rate of 2.6% in the third quarter, according to data published by the Bureau of Economic Analysis. This was slightly better than analyst’s expectations.
  • Data from the Mortgage Bankers Association showed the average rate on a 30-year fixed-rate mortgage rose by 22 basis points to 7.16% for the week ended 21 October, the highest level since 2001. Mortgage applications fell by 1.7% from the previous week.
  • The final October reading of the University of Michigan's consumer sentiment index rose 0.1 points to 59.9, 1.3 points above the September reading. Though US sentiment has continued to improve from the record low of 50 set in June, the increase in inflation expectations highlighted consumer caution in terms of rising prices and growing uncertainty over the economic outlook.

EUROPE COMMENTARY

  • The European Central Bank (ECB) raised its deposit rate by a further 75 basis points to 1.5%, the highest rate since 2009. It also signalled further rate hikes to come.
  • Eurozone business activity fell in October at the fastest pace in two years. The composite PMI, which accounts for both the services and manufacturing sectors, fell from 48.1 in September to 47.1.

ASIA MARKETS COMMENTARY

  • Another wave of yen weakening did not prevent  the Bank of Japan (BoJ) from leaving monetary policy unchanged at its most recent meeting – holding short-term and long-term interest rates at current levels. The depreciation of the yen has increased pressures on households through higher prices for daily necessities, while also squeezing the profits of firms with weak pricing power.

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