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 117 | 7th November, 2022

UK COMMENTARY

  • The Monetary Policy Committee of the Bank of England (BoE) voted by a majority of 7-2 to raise interest rates by 75 basis points to 3% during its November meeting. This was the largest rate hike since 1989, raising the cost of borrowing to the highest level since late-2008.

  • UK house prices fell by an average of 0.4% in October, according to Halifax figures. This was the sharpest fall since February 2021, following a 0.1% drop in September, and pulled the annual rate of house price inflation down from 9.8% to 8.3%. This means the typical UK property now costs £292,598, down from £293,664 in September.

  • The S&P Global/CIPS Purchasing Managers’ Index (PMI) survey for the UK construction sector indicated further construction activity. The October reading for the sector was 53.2, up from September’s 52.3 reading. Any reading above 50 represents economic expansion. 

  • The PMI reading for the UK services sector fell from 50.0 in September to 48.8 in October. Services companies reportedly suffered from shrinking demand and greater risk aversion among clients, while escalating energy bills and strong wage pressures pushed up costs again.

  • The BoE successfully auctioned £750m of shorter-dated government bonds, as it began its quantitative tightening (QT) programme. The launch of QT was delayed from October, following the market volatility unleashed by the government’s mini-budget. The BoE plans to sell £80bn out of its £838bn stock of government debt which it began buying in 2009.

NORTH AMERICA COMMENTARY

  • The US Federal Reserve (Fed) raised the target range for the federal funds rate by 75 basis points to 3.75%-4.0% at its November meeting. This was the Fed’s sixth consecutive rate hike and the fourth straight three-quarter point increase, pushing borrowing costs to the highest since 2008.

  • US non-farm payroll jobs increased by 261,000 in October, according to the US Department of Labor, despite high inflation and rising interest rates. Economists had forecast a rise of around 200,000 jobs. Average hourly earnings rose by 0.4% month-on-month, more than the 0.3% expected.

EUROPE COMMENTARY

  • In Germany, industrial orders fell by more than expected in September, according to data supplier Destatis. This added to fears Europe’s largest economy was moving into recession territory. New orders at German factories fell 4.0% month-on-month, including a 7% tumble in foreign orders. Analysts had expected a much smaller fall, to 0.5%.

  • S&P Global’s Eurozone manufacturing PMI index fell from 48.4 in September to 46.4 in October. This was a 29-month low, and worse than the previous ‘flash’ initial estimate. 

EMERGING MARKETS COMMENTARY

  • Chinese exports and imports unexpectedly contracted in October, as firms were hit by domestic COVID-19 curbs as well as the global economic slowdown. Exports fell 0.3% year-on-year, the biggest drop since May 2020 and a stark reversal on September’s export growth of 5.7% Economists had expected exports to fall to 4.3%.

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