Oct 13, 2023 2:58:03 PM
Weekly Market Wrap 13/10/2023
US CPI data was released this week, however conflict in the Middle East was a key driver of treasury yields. Oil prices rebounded after US sanctions were increased, whilst the IMF revised its growth expectations for Europe.
The UK market ended the week higher. Andrew Bailey noted on Friday that future interest rate decisions would be tight after officials voted in September to keep interest rates by the finest of margins. Jeremy Hunt confirmed that the Autumn budget would reflect caution around the uncertain and deteriorating economic environment. The number of companies declared insolvent in England and Wales was 17% higher than a year before.
The S&P 500 is currently 0.95% higher this week, whilst the Nasdaq is set to end the week 1.41% higher. US CPI data was released on Thursday, which showed core inflation fell in line with expectations from 4.3% to 4.1%. Headline inflation remained at 3.7%, when a slight decrease to 3.6% had been forecast by economists. Markets are still pricing in no further hikes and are expecting cuts in 2024.
The Euro Stoxx 50 is currently 2.07% higher this week. Data showed Eurozone industrial production rose by more than expected in August, led by consumer goods. The IMF cut estimates for eurozone growth to 0.7% from 0.9% in 2023 and 1.2% from 1.5% in 2024, expressing concerns about geopolitical fragmentation and a resurgence of inflation.
Yields on US 10-year bonds fell this week by 0.09% to 4.70% this week, driven lower early in the week after investors looked for safe haven assets given the ongoing conflict, as well as comments from Fed officials caused investors to believe that further rate hikes may not be needed. Yields rose on Thursday after the release of US CPI data, as the higher than expected inflation figures cast doubt into markets.
Brent crude gained 5.94% this week, rising to $89 per barrel, gaining on Friday after the US increased sanctions against Russian exports, increasing fears of reduced supply.
The Week Ahead
Monday – Italy CPI
Tuesday – UK Unemployment & US Retail Sales
Wednesday – UK CPI & European CPI
Thursday – US Initial Jobless Claims
Friday – UK Retail Sales
*x% up/down to price as of last week’s close