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 139 | 17th April, 2023
UK COMMENTARY
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The UK economy recorded flatline gross domestic product (GDP) growth of 0.0% in February according to the Office for National Statistics. This followed the UK being hit by flurries of public sector strikes that weighed on activity.
- Britain’s workforce participation has slowed, according to figures from the Organisation for Economic Co-operation and Development (OECD). It showed the UK’s labour force participation – the percentage of working-age adults either in work or seeking work – was 78.6% in the final three months of 2022, down from 79.5% in the same period at the end of 2019. Britain now ranks bottom of the G7 countries for workforce participation, trailing almost every other advanced economy in the world.
NORTH AMERICA COMMENTARY
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US inflation, as measured by the Consumer Prices Index (CPI) rose by 5.0% in the year to March, lower the forecasts for around 5.2%. This was down from February’s reading of 6% and the lowest level of annual US inflation in
almost two years, showing inflationary pressures continued to ease.
- US consumer confidence – as reported by the University of Michigan’s consumer sentiment index – edged up from March’s 62.0 to 63.5 in April, with US consumers more optimistic about the economic outlook and prospects.
- US retail sales fell 1% in March, twice as large a fall than analyst expectations. Spending at motor vehicle and parts dealers was down 1.6% month-on-month, while electronics spending dropped 2.1% in the month, 10.3% lower than last year.
EUROPE COMMENTARY
- The Eurozone’s overall retail sales fell by 0.8% month-on-month in February as expected, signalling continued broad-based weakness in the trade sector amid still-high goods inflation. This increases the likelihood of a fifth consecutive
quarterly contraction in Eurozone trade volumes, dragged down by all of its sub-sectors.
- Eurozone factory output increased at its fastest pace for six months in February, rising by a faster-than-expected 1.5% during the month. This was better than forecasts of a 1.0% rise, and suggested Europe’s economy started 2023 more strongly than expected.
ASIA COMMENTARY
- China's goods exports in US dollar terms surged 14.8% year-on-year (y/y) in March, reversing the average 6.8% y/y fall in January-February combined. Across product categories, there was a broad-based improvement in March. The key contributors were
exports of mechanical and electrical products, rising 12.3%, motor vehicles more than doubled, and steel increased by about 52%.
- India's CPI inflation rose 5.7% on an annual basis in March, down markedly from 6.4% in February, according to its National Statistics Office. This put inflation within the Reserve Bank of India’s tolerance band of 2%-6% for the first time in three months, as price pressures eased across food, fuel, and core categories.
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