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 125 | 9th January, 2023 

UK COMMENTARY

  • The S&P Global/CIPS Purchasing Managers' Index (PMI) data for the construction industry confirmed activity fell in December at its sharpest rate since May 2020, as the sector was hit by rising interest rates and cost pressures. The survey fell from 50.4 in November to 48.8 in December –– which is below the 50 level that separates growth from contraction.
  • Faced with this downturn, construction firms cut jobs for first time since January 2021 as business confidence for the construction sector turned negative, according to S&P.
  • The average UK house price fell for the fourth month in a row in December, according to Halifax. Property values decreased 1.5% in December, after a 2.4% drop in November, a 0.4% decrease in October and a 0.1% dip in September.
  • S&P Global’s PMI survey data for the services sector showed a fractional fall in activity at the end of 2022. The data firm published services sector PMI of  49.9 for December, an improvement on November’s 48.8 and just below the 50-point mark showing stagnation.
  • Figures released by the Bank of England showed UK mortgage approvals for house purchases fell to 46,100 in November from 57,900 in October, the lowest level since June 2020. The effective interest rate – the actual interest rate paid – on new mortgages increased by 26 basis points, to 3.35% in November.

NORTH AMERICA COMMENTARY

  • The US jobs market ended 2022 on a high note, adding another 223,000 jobs in December, the Department of Labor reported last week. As such, the US unemployment rate decreased to 3.5%, back to its pre-pandemic low.
  • US wage growth slowed in December – a blow to US workers, but helpful for the US Federal Reserve’s efforts to curb inflation. The average hourly earnings for all employees on private nonfarm payrolls rose by 9 cents, or 0.3%, to $32.82. That marked a slowdown on November’s average hourly earnings which rose by 0.4% to $32.73.
  • The downturn in US manufacturing activity intensified in December. According to the Institute of Supply Management, its monthly PMI survey showed a further decline to 48.4 from 49 in November, marking a two-and-a-half-year low.

EUROPE COMMENTARY

  • Eurozone inflation fell in December at a faster pace than expected, as energy prices retrenched. Consumer prices across the area rose by 9.2% in the year to December, down from 10.1% in November.
  • The decline was driven by lower energy prices – annual energy price inflation slowed to 25.7%, compared with 34.9% in November. European gas prices fell back to their pre-Ukraine invasion levels, but remained still sharply higher than two years ago.
  • The S&P Global Eurozone Composite PMI showed the economic downturn in the Eurozone eased in December as price pressures cooled. The final reading for December was revised higher to 49.3, up from the preliminary estimate of 48.8, and while still in negative territory, this was a five-month high.

EMERGING MARKETS COMMENTARY

  • In China, factory activity declined at a sharper pace in December as surging COVID-19 infections disrupted production and held back demand, after Beijing removed most COVID-19 restrictions. The Caixin/Markit manufacturing PMI fell to 49 in December from 49.4 in November.

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