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 153 | 31st July, 2023 

UK COMMENTARY

  • The S&P Global/CIPS Purchasing Managers’ Index (PMI) initial (‘flash’) survey for July highlighted a slowdown in UK business activity. The composite index was recorded at 50.7, the lowest reading for six months and a significant shift down from June's 52.8. Flatlining new orders and lower business optimism over future output suggested activity could continue to disappoint in the months ahead.

NORTH AMERICA COMMENTARY

  • US gross domestic product (GDP), the key measure for economic growth, grew at an annualised rate of 2.4% in the second quarter of 2023 (April to June), the equivalent of quarterly growth of 0.6%. This was an improvement on the 2% annualised GDP growth in the first quarter (January to March). More importantly, it beat analyst and economist expectations of a slowdown to 1.8%.

  • The US retail property market was little changed in June, as pending home sales increased 0.3%. This suggested existing home sales would remain subdued heading into the third quarter. Higher mortgage rates have affected affordability and also restrained supply, with large numbers of homeowners locked into much lower rates and reluctant to move.

EUROPE COMMENTARY

  • The European Central Bank (ECB) lifted interest rates by 0.25% to a rate of 4.25%, back to its highest-ever level, in an attempt to further cool Eurozone inflation.
  • The ECB’s deposit rate – the rate banks receive for depositing money with the central bank overnight – increased to 3.75%, matching the previous record set in 2000-2001. Raising  borrowing costs will further squeeze households and businesses, despite inflation falling from 6.1% in May to 5.5% in June.
  • Eurozone business output fell at the fastest rate for eight months in July, according to HCOB flash PMI survey data produced by S&P Global. Eurozone demand deteriorated across the board in July, with new business orders shrinking at the fastest rate since last November.

GLOBAL COMMENTARY

  • The International Monetary Fund (IMF) raised its 2023 global growth forecast from 2.8% in April to 3.0% in July. It also expects 3.0% growth in 2024 (global growth was 3.5% in 2022). However, despite improved forecasts for the coming years, it said global economic growth “remains weak by historical standards”.

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