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 151 | 17th July, 2023 

UK COMMENTARY

  • The UK economy contracted marginally in May, according to the Office for National Statistics (ONS). Gross Domestic Product (GDP) fell by 0.1% due to stagnation in the services sector and contraction in factories.

  • The Bank of England’s credit conditions survey showed lenders reported the biggest increase in mortgage defaults since 2009. Mortgage defaults in the three months to the end of May leapt to 30.9 on its index, up from 14 in the first quarter of 2023.

  • The average two-year fixed rate on a residential has risen from 6.66% to 6.7%, the highest since August 2008, according to Moneyfacts. The average five-year fixed rate climbed from 6.17% to 6.2%, the highest since last October.

  • The ONS reported that UK wage growth reached 7.3% from March to May, driven by the strongest rise in private sector pay growth outside the pandemic period of 7.7%. City analysts had forecast growth to ease to 7.1%.

  • Unemployment rose to 4% in March-May, up from 3.8%, according to the latest ONS labour report. It also reported the number of people on company payrolls dipped by 9,000 in June to 30.0 million.

NORTH AMERICA COMMENTARY

  • In the US, consumer price index (CPI) inflation (CPI) slowed by more than expected, falling from  4% in May to 3% in June, according to the US Bureau of Labor Statistics. Core CPI inflation, which removes the volatile effects of food and energy components, was also lower than expected at 4.8%, while economists had expected a rise to 5%.

  • The University of Michigan’s Consumer Sentiment Index jumped from 64.4 in June to 72.6 in July, the highest reading since September 2021. The sharp upturn in optimism from consumers was considered due to improving economic conditions and a more positive economic outlook. 

  • The Bureau of Labor Statistics reported that producer price inflation, which measures the prices charged by goods makers and service providers, fell to just 0.1% year-on-year in June, down from 0.9% year-on-year in May, and 11.2% in June 2022, when companies were hiking prices at a hot pace.

EUROPE COMMENTARY

  • Industrial output in Germany, Europe’s largest economy, fell by 0.2% month-on-month in May. Energy and consumer and intermediate goods posted contractions, while capital goods advanced.
  • Eurozone retail sale volumes stagnated again in May, undershooting expectations of a minor pick-up.
  • Eurozone construction activity – as measured by the Purchasing Managers’ Index – fell to 44.2 in June, signalling that the sector is still struggling due to tight financing conditions and greater uncertainty. Residential construction was particularly weak and with the European Central Bank not yet finishing hiking interest hikes, the sector could suffer further.

ASIA COMMENTARY

  • China’s economy grew at a slower pace than expected in the second quarter, hampered by the ongoing property sector issues and a slowdown in consumer spending. GDP grew by 6.3% year-on-year in the second quarter, missing forecasts of 7.3% growth.

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