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Weekly Market Wrap 13/01/2023

Global markets have built on the optimistic start to the new year, as economic data surprised to the upside most notably UK GDP, expectations of interest rate rises from the US Fed were moderated and there were signs of demand growth in China.

UK Market  

The UK market ended the week higher, as the UK economy unexpectedly expanded (+0.1% vs e.-0.2%)) in November and looked set to avoid falling into a technical recession. The boost from the World Cup and video game sales led to the surprise growth; the economy however remains below pre-pandemic levels and outlook for 2023 remains bleak. Jeremy Hunt reiterated the government’s focus on reducing inflation in order to “get the economy growing again”. 

US Markets 

The S&P 500 is currently ending the week up 4.18% at 3,983 and the NASDAQ is up 3.80% at 11,460. US inflation fell to the lowest level in more than a year, 6.5%, in a sign that inflationary pressures may have peaked amid the Fed’s monetary tightening policy. The Fed has indicated that it intends to continue to raise interest rates beyond 5%; market participants expect a reversal of course at around that rate. 

European Markets

The Euro Stoxx 50 is currently up 2.88% at 4,134, the DAX is 3.06% higher at 15,057 whilst the CAC 40 has gained 1.84% to 6,987. Germany stagnated in the final quarter and grew 1.9% across the full year, avoiding a recession for now. The data was marginally above estimates and finance minister Lindner concluded that “Our economy is adaptable and robust”. The expected recession across the wider eurozone is likely to be milder than feared. Like the Fed, the ECB is signalling to investors that monetary policy is likely to be more hawkish than market expectations. 

Asian Markets

The Bank of Japan are under pressure as bond yields and the yen rose following the revisions to its longstanding loose monetary policy; yields rose above the current ceiling of 0.5%.  

Fixed Income  

Yields on the US 10-Year fell this week to 3.47%, as inflation looked to be abating globally.  


Brent Crude rose 7.25% this week to $84 per barrel, as there were signs of demand growth in China and expectations of less aggressive interest rate rises in the US. 


The Week Ahead   

Monday Martin Luther King Day 

Tuesday – China GDP & retail sales, UK unemployment, German CPI 

Wednesday – BoJ interest rate decision, UK CPI, US retail sales 

Thursday –  

Friday – PBoC interest rate decision 

*Price changes as of last week’s close unless stated otherwise.