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Weekly Market Wrap 20/10/2023

The O-IM Market Update this week focuses on UK inflation data as it failed to provide comfort to consumers, however another interest rate increase is not guaranteed. US retail sales data points to a strong economy, whilst UK retail data paints a very different picture. Both Joe Biden and Rishi Sunak made trips to Israel this week.

UK Market  

The UK market ended the week lower. UK CPI data released on Wednesday came in sightly above expectations, remaining flat at 6.7%, when economists had forecast a slightly drop to 6.6%. Core CPI did fall slightly in September, reaching 6.1% down from 6.2%, however estimates had hoped to see a figure of 6.0%. Rising fuel costs was the main factor that kept inflation at elevated levels over the month, whilst food and drink prices fell in September. UK retail sales fell by more than expected in September, falling by 0.9% across the month when a drop of 0.2% was forecast. The slow down in consumer spending has pushed markets to price in no further interest rate hikes from the Bank of England.

US Markets

The S&P 500 is currently 1.15% lower this week, whilst the Nasdaq is set to end the week 1.41% lower. US retail sales data came in significantly stronger than expected, rising by 0.7% MoM when an increase of 0.3% had been expected. The upside surprise in spending pushed markets lower after investors feared that the strength of the consumer could lead the Federal Reserve to believe that another rate hike may be required.

European Markets 

The Euro Stoxx 50 is currently 2.66% lower this week. Next week the European Central Bank will announce its latest interest rate decision, economists fully expect rates to be held steady as Eurozone inflation continues to push lower. German producer prices fell unexpectedly in September, falling by 0.2% when an increase of 0.4% had been forecast, this slowdown in prices may give markets hope that tightening in Europe may be beginning to work.

Fixed Income

Yields on US 10-year bonds rose by 36 basis points this week to 4.98% this week, after Fed chairman Jerome Powell told investors in a speech on Thursday that the ongoing strength in the US economy could require higher rates to bring inflation lower.


Brent crude gained 2.95% this week, rising to $93.59 as concerns  over disruption to supply grow as markets fear the conflict in Gaza could spread to the larger nations in the middle east.


The Week Ahead

Monday – European Consumer Confidence

Tuesday – UK Unemployment

Wednesday – Canada Interest Rate Decision

Thursday – US GDP & Initial Jobless Claims

Friday – US Core Personal Consumption

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