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Weekly Market Wrap 01/09/2023

Key inflation data was released in both the US and Europe, proving investors with a clearer picture on what central banks could do next. The UK housing market continues to suffer, whilst US jobs data surprises.

UK Market  

The UK market ended the week higher. The UK manufacturing PMI data released on Friday showed that orders from UK factories shrunk by the most since Covid-19, with the PMI reading falling to 43 in August from 45.3 in July. The key driver behind this reading is persistent high rates both in the UK and abroad which has caused businesses to cut back purchasing. UK house prices fell by the most since 2009, falling by 0.8% in August as mortgage rates remain dramatically above average levels.

US Markets

The S&P 500 is currently 2.31% higher this week, whilst the Nasdaq is set to end the week 3.74% higher. PCE price data released this week was in line with economists’ expectations (3.3% YoY), strengthening the market’s view that the data dependent Federal Reserve will hold rates steady at the next meeting. Payrolls data came in higher than expected on Friday, with both Non-Farm and Private Payrolls significantly higher than forecast. Unemployment also unexpectedly rose from 3.5% to 3.8%, the highest level seen since February 2022, when a flat reading of 3.5% was expected. The rise in unemployment has boosted investor hopes that the Fed will resist the urge to tighten further.

 European Markets 

The Euro Stoxx 50 is currently up 1.46% this week. Inflation data released on Thursday provided a mix of sentiment, as core inflation came in lower than expected (6.2% vs 6.3%est) falling from 6.6% in July, whilst headline inflation was flat at 5.3%, when a fall to 5.1% had been expected. This data has left the door open for a potential ECB rate hike in September as inflation proves to be more stubborn than anticipated, however markets are currently pricing in no further rate hikes.

 Fixed Income

Yields on US 10-year bonds fell 0.13% to 4.09% this week, as the market’s expectation that the Fed will not hike rates further strengthened after the release of US jobs and inflation data.


Brent crude gained 3.07% this week to $87 per barrel, upon expectations of continued production cuts by Saudi Arabia.



The Week Ahead

Monday –  

Tuesday – RBA Rate Decision

Wednesday – EU Retail Sales

Thursday – EU GDP, US Initial Jobless Claims

Friday – German CPI




*x% up/down to price as of last week’s close