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 148 | 26th June, 2023 

UK COMMENTARY

  • The Bank of England (BoE) raised UK interest rates by 50 basis points to 5.0%, a 15-year high as it continued its fight against inflation and stubborn wage increases.
  • May’s inflation data caused further difficulties for the BoE, after the Office for National Statistics (ONS) reported that the Consumer Prices Index (CPI) rose by 8.7% in the year to May, unchanged from April’s reading. This was higher than economist forecasts of 8.4% and maintained the pressure for the BoE to keep rates higher for longer.
  • Following the latest interest rate hike, UK Chancellor Jeremy Hunt brokered an agreement with mortgage lenders that mortgage holders be given a 12-month grace period before starting repossession proceedings.
  • The UK’s Purchasing Managers’ Index (PMI) – which tracks growth in the UK’s private manufacturing and service sector firms – eased to its slowest level for three months. The interim ‘flash’ reading for June showed a fall from 54 in May to 52.8. This was a sharper slowdown than expected, with economists forecasting 53.7 for June. Any reading above 50 shows sector expansion.
  • The ONS reported that private rental prices paid by UK tenants increased by 5% in the 12 months to May 2023 – the largest percentage change since the start of the data series in January 2016.
  • Government borrowing doubled in May, according to the ONS. Net debt reached £2.6trn at the end of May, estimated at 100.1% of gross domestic product (GDP). This meant public sector debt had risen to more than 100% of economic output for the first time since 1961.
  • Data firm Kantar reported that annual grocery inflation had dropped to 16.5% for the four weeks to 11th June – the lowest level recorded in 2023. This was a fall from 17.2% recorded a month ago, and below March’s record high of 17.5%.

NORTH AMERICA COMMENTARY

  • The US Conference Board's Leading Economic Index (LEI) fell 0.7% in May after a 0.6% decline in April with depressed consumer expectations and negative credit dynamics largely responsible for May’s decline. The LEI is now at its lowest level since July 2020, and the downward trend suggests an economic slowdown in the months ahead.

EUROPE COMMENTARY

  • Eurozone growth nearly stalled at the end of Q2, according to June’s flash PMIs produced by S&P Global. A reading of 50.3 left the composite PMI barely in expansion territory, in stark contrast to the start of Q2 when PMI was recorded at 54.1. This reflected slower growth in the services sector and suggested the Eurozone’s manufacturing downturn was deepening.

ASIA COMMENTARY

  • The Bank of Japan left short-term policy rates at -0.1% and long-term rates at around 0% at its June policy meeting. The decision was in line with economist expectations as with less economic pressure and some improvement in market functioning, there was no immediate reason for the central bank to tighten monetary policy at this stage.

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