DISAPPOINTING ECONOMIC GROWTH POINTS TOWARDS THE END OF CENTRAL BANKS’ RATE HIKES
This week it felt like we may be entering the final phase of central banks’ battle against inflation.
Read The Full ArticleGILTS RALLY AS MARKETS CONSIDER THE IMPACT OF AN ECONOMIC SLOWDOWN
This week saw further volatility in bond markets. August has been a very poor month for government bonds as yields in the UK and US have increased on fears that rates may go higher and remain elevated for longer.
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GOVERNMENT BOND YIELDS RISE AS CONCERNS OVER STICKY INFLATION RETURN
This week has been a busy one for UK economic data. The headline figures clearly follow recent trends with wages rising rapidly, unemployment near historic lows and inflation falling.
Read The Full ArticleINFLATION REMAINS IN THE SPOTLIGHT AS ECONOMIES CONTINUE TO TICK OVER
This week there was a modicum of good news; inflation in the US continued to abate with the fabled “soft landing” of the US economy still possible, despite a slight uptick in unemployment claims.
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US DOWNGRADE LEAVES MARKETS UNMOVED BUT INVESTORS REMAIN CONCERNED ABOUT THE OUTLOOK
This week brought a surprise cut to the US government’s credit rating, while the Bank of England continued its tightening campaign with another 0.25% rate hike.
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FED AND ECB DELIVER AS EXPECTED BUT MARKETS STILL NERVOUS OF FURTHER HIKES
This week the Federal Reserve and European Central Bank delivered rate hikes as expected. By stating that rate decisions will be determined by the data, the outcome of these meetings was effectively settled some weeks ago.
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IMPROVED INFLATION WELCOMED BY MARKETS BUT IT IS TOO EARLY TO CLAIM IT IS UNDER CONTROL
This week’s election results and inflation update looked very similar for Rishi Sunak’s government – better than expected, but far from good. The Conservatives defied predictions of a loss of all three constituencies.
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EQUITY AND BOND MARKETS BENEFIT AS US INFLATION DROPS TO ITS LOWEST IN TWO YEARS
This week brought a significant shift in the narrative surrounding inflation. US headline inflation dropped to 3% in June. Core inflation has been more resilient than the headline rate but it also fell.
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Summer Outlook
Positive equity markets have been offset by declines in bond markets as persistently high inflation has pushed central banks towards further rate hikes.
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PESSIMISM FROM THE FEDERAL RESERVE IS CONTAGIOUS AS VOLATILITY RETURNS TO EQUITY MARKETS
This week government bonds took another leg down and volatility returned to previously bullish equity markets.
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