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 149 | 3rd July, 2023 

UK COMMENTARY

  • The Office for National Statistics confirmed that the economy grew by 0.1% in the first three months of this year, the same as in the fourth quarter of 2022. This matched the initial estimate and confirmed the UK economy avoided contraction through the sharp cost of living crises last winter.
  • UK house prices have surprised to the upside in June. The surprise monthly rise of 0.1% offset the 0.1% fall in May and missed the economist forecast of a 0.3% fall, according to Nationwide building society. The average cost of a house in the UK pushed up to £262,239.
  • UK car production increased for the fourth consecutive month in May by 26.9% year on year, according to the latest figures published by the Society of Motor Manufacturers and Traders (SMMT).
  • The Bank of England showed households withdrew a net £4.6bn from banks and building societies in May from recently released data, the highest level of withdrawals since it started collecting the monthly data in October 1997. This largely aligns with views that consumers are using their funds to sustain living standards or to pay off mortgages or loans before needing to refinance at higher interest rates.
  • Shop Price annual inflation decelerated to 8.4% in June – down from 9.0% in May – according to the latest data from the British Retail Consortium and NielsenIQ. Underlying data showed that food inflation decelerated to 14.6% in June, down from 15.4% in May. This is still a markedly higher year-on-year increase relative to previous years, but still is a positive indicator that inflationary pressures are falling.

NORTH AMERICA COMMENTARY

  • The US Conference Board's Leading Economic Index (LEI) fell 0.7% in May after recording a 0.6% decline in April. The index remains on a firm downward trend, with depressed consumer expectations and negative credit dynamics largely responsible for last month’s decline. The LEI now stands at its lowest level since July 2020 and suggests that an economic slowdown will begin in the months ahead.
  • The University of Michigan's consumer sentiment index edged higher in June, increasing from 63.9 in the preliminary estimate to 64.4 in the final estimate. This an improvement from the 59.2 in May and the highest since February this year.

EUROPE COMMENTARY

  • Eurozone prices – as measured by the Consumer Price Index – increased by 5.5% in the year to June, a decline from the 6.1% figure in May. This had beaten economists’ expectations of 5.6%, but still over the European Central Bank’s target of 2%.
  • However, core inflation ticked up to 5.4%, pushed up by transitory base effects. Whilst the uptick in core inflation does not mean that the disinflationary process has stopped, it will embolden the European Central Bank’s (ECB) to continue its tightening cycle in the upcoming meetings.
  • The International Monetary Fund (IMF) recently released a report stating that companies increased prices by more than the spiking costs of imported energy. Overall profits accounted for 45% of price rises since the start of 2022. Also, they stated that a surge in import costs after Russia’s invasion of Ukraine also drove Eurozone inflation over 10% last year.

ASIA COMMENTARY

  • The latest Purchasing Managers’ Index (PMI) for Chinese manufacturing has slipped to 50.5 in June from 50.9 in May, as reported by Caixin, close to the 50-point mark showing stagnation.

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