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 136 | 27th March, 2023 

UK COMMENTARY

  • The Bank of England (BoE) raised interest rates by an expected 0.25% to 4.25%, responding to higher than anticipated UK inflation in February. The BoE noted that the economic outlook for the UK had slightly improved and was no longer predicting a technical recession.
  • The Office for National Statistics (ONS) reported annual inflation – as measured by the consumer prices index – increased from 10.1% in January to 10.4% in February, surprising analyst forecasts of a modest fall to 9.9%.
  • Core inflation, which strips out food, energy, alcohol and tobacco, rose last month to 6.2% from January’s 5.8%, reaffirming the UK’s stubborn inflationary issues.
  • The flash reading from the S&P Global/CIPS Purchasing Managers’ Index (PMI) monthly survey showed a drop in the composite index from 53.1 in February to 52.2 in March. As this was above the 50 mark, it still indicates   continued expansion.
  • This was also the case for activity in the services sector. The flash PMI weakened slightly from 53.5 in February to 52.8 in March. The manufacturing sector dropped into negative territory, with the flash PMI falling from 50.9 to 49.
  • UK retail sales volumes improved with an increase of 1.2% in February compared to January’s 0.9% increase (revised higher from 0.5%), and analyst expectations of a 0.2% gain. This was the biggest monthly rise since October, as reported by the Office for National Statistics (ONS).
  • The rental prices paid by private tenants increased by 4.7% in the 12 months to February 2023, according to the ONS. This was the largest annual percentage change since the data series began in January 2016.

NORTH AMERICA COMMENTARY

  • The US Federal Reserve raised interest rates by 0.25%, pushing the Federal Funds rate to a new range of 4.75%-5.0%, the highest since 2007.
  • Monthly US durable goods orders unexpectedly fell by 1% in February, indicating that investment in business equipment had weakened due to recent systemic issues.
  • US home sales jumped by much more than expected in February, as the spring selling season got underway. Sales of previously-owned homes rose 14.5% compared with January, according to the seasonally-adjusted count by the National Association of Realtors. That lifted sales to an annualised rate of 4.58mn units.

EUROPE COMMENTARY

  • The S&P Global PMI flash reading for Europe showed the composite index at 54.1 in March, up from 52 in February. The services index strengthened to 55.6 from 52.7, while manufacturing activity contracted, with the index dipping from 50.1 in February to 49.9.
  • The International Monetary Fund, which acts as the global lender of last resort, agreed a package of support for Ukraine of $15.6bn (£12.8bn). Ukraine’s economic output – as measured by gross domestic product (GDP) – shrank 30% last year and poverty levels have risen significantly. Pressure on public spending to support the economy and manage Ukraine’s war effort is considerable.

ASIA COMMENTARY

  • In Japan, nominal goods exports increased 7% year-on-year in February, after a 4% rise in January. Last month’s improvement was flattered by a favourable Lunar New Year calendar effect – taken together, export growth in the first two months of 2023 slowed to 5%, down from 11% in December 2022. However, the recovery in Japanese auto exports has alleviated some of the downturn.

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