You're now leaving O-IM

O-IM’s website and/or mobile terms, privacy and security policies don’t apply to the site or app you're about to visit. Please review its terms, privacy and security policies to see how they apply to you. O-IM isn’t responsible for (and doesn’t provide) any products, services or content at this third-party site or app, except for products and services that explicitly carry the O-IM name.

Cancel Proceed

Coming soon ...


Weekly Market Wrap 18/12/2023

All three major central banks announced their latest interest rate policies this week, however the Federal Reserve’s surprising policy pivot was not matched by the BOE and ECB. Bond yields tumbled and prices rallied after the Fed’s updated rate outlook was announced on Wednesday

UK Market  

The UK market ended the week higher. The Bank of England kept rates at 5.25% in Thursday’s meeting, in line with market expectations. Governor Andrew Bailey warned investors that there was “still some way to go” for inflation to return to acceptable levels and for rate cuts to begin being considered. UK inflation data is set to be released on Wednesday, with CPI expected to slow slightly from 4.6% to 4.4% whilst core CPI is forecast to drop to 5.5% from 5.7%. Despite a continued fall in inflation, the BoE will likely want to see significantly more progress towards the 2% inflation target before any rate cuts can be considered, The market is currently pricing in the first rate cut for the BoE in May 2024.

US Markets

The S&P 500 ended the week 2.49% higher, whilst the Nasdaq ended the week 3.35% higher. US CPI data released on Tuesday was in line with economist forecasts, with headline inflation slowing slightly to 3.1%, whilst core inflation was flat at 4.0%. Equity markets in the US rallied on Wednesday afternoon, after Federal Reserve Chairman Jerome Powell delivered a dovish speech after keeping rates unchanged. Powell told investors that the Fed was proceeding carefully after raising rates “well into restrictive territory” and acknowledged that higher rates had slowed economic activity. Powell also commented that the full effects of higher rates have likely not been felt yet by the economy. The dovish comments were reinforced by the release of the FOMC’s dot plot, which showed 75 basis points worth of rate cuts estimated to occur in 2024.

 European Markets 

The Euro Stoxx 50 ended the week 0.15% higher. The European Central Bank stuck firmly to its stance on interest rates, with ECB President Christine Lagarde telling investors that “we did not discuss rate cuts at all.” Despite repeated protests from Lagarde that rates need to remain high to combat inflation, markets are pricing in the first ECB rate cut in April. In November, CPI for the Eurozone was at 2.4% down from 9.2% at the start of 2023.

 Fixed Income

Yields on US 10-year bonds fell by 31 basis points across the week, with bonds rallying after Jerome Powell announced to the market that 75 basis points worth of rate cuts was expected.


Brent crude rose by 0.94% ending the week at $76.55 per barrel.


The Week Ahead


Tuesday – BoJ Rate Decision

Wednesday – UK CPI & RPI

Thursday – US GDP & Initial Jobless Claims

Friday – UK GDP & Retail Sales


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