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 146 | 12th June, 2023
UK COMMENTARY
- The UK’s cost of living crisis is weighing on high street sales. According to business advisory firm BDO’s latest High Street Sales Tracker, total sales (both online on high street store
sales) fell by 1.5% overall compared with last May, moving into negative territory for the first time in more than two years.
- The Treasury reported that protecting households and businesses from spiralling energy bills between October 2022 and March 2023 cost £39.3bn.
- Rising interest and mortgage rates are beginning to impact the UK housing market. Nationwide Building Society reported UK house prices fell at an annualised rate of 3.4% in May – the strongest decline since July 2009, when the British economy was recovering from the fallout of the 2008 financial crisis.
- S&P Global reported that UK house building remained by far the weakest-performing part of the UK construction sector in May, with output declining at the steepest pace for three years (when building sites locked down due to COVID-19).
- The UK remains Europe’s most desirable region for financial services investment – attracting 25% of new projects last year – according to professional services firm Ernest & Young. It reported the UK attracted 76 financial services projects in 2022 – an increase of 13 projects from 2021, while runner-up France secured 45 projects. A total of 292 financial services foreign direct investment projects took place across Europe last year, up 5%.
NORTH AMERICA COMMENTARY
- The number of people in the US filing new claims for unemployment benefit hit the highest level in over 18 months last week.
The Labor Department reported 261,000 ‘initial claims’, an increase of 28,000 from the previous week’s figure and the highest reported number since 30th October 2021.
- The US Federal Reserve reported US consumer credit rose $23bn in April, close to consensus forecast for a $22bn increase. The increase was largely attributed to deteriorating income growth and tighter lending standards that had dampened consumer spending.
EUROPE COMMENTARY
- The rising cost of living crisis dragged the Eurozone economy into a technical recession in the first three months of the year. Eurostat – the European Union’s statistics agency – reported gross domestic product (GDP) fell by 0.1% in the first quarter of 2023 and in the final three months of 2022 after revisions to earlier estimates.
GLOBAL COMMENTARY
- The renewal of the Black Sea grain deal – the deal brokered by the United Nations to ensure Ukraine could export crops through the Black Sea – has put downward pressure on global food prices. Corn and wheat prices dropped 7.9% and 2.76% month-on-month in May, and traders now anticipate adequate levels of supply over the coming quarters.
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