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Weekly Market Wrap 23/09/2022

Global markets fell markedly as global central banks sharply raised interest rates in a bid to combat inflation as the UK Chancellor unveiled an enormous “mini-budget” on Friday. 

US Markets 

The S&P 500 is currently ending the week down 2.98% at 3,758 and the NASDAQ is down 3.03% at 11,501. The US Fed raised interest rates by 0.75% on Wednesday in an aggressive move to rein in inflation and signaled more raises to come. Projections are that rates would peak at 4.4% and not begin to reduce before 2024. The US labor market figures released on Thursday were resilient despite strengthening recession signals elsewhere. 

UK Market  

A week that started with a bank holiday and day of reflection soon spun into action ending in the crescendo of the BoE Interest Rate Decision on Thursday and “mini-budget” on Friday sent the gilt market into a tailspin. UK stock markets were roughly 3% lower on the week. 

The Bank of England lifted interest rates by 0.5% on Thursday to 2.25%, with more expected to come in November.   

The Chancellor’s enormous “mini” budget on Friday is estimated to cost £45bn in the biggest set of tax cuts in the last 50 years. The basic rate of income tax will be cut from 20p to 19p in April, the top 45p rate of income tax has been removed, the recent increase to national insurance has been reversed, stamp duty has been reduced a planned corporation tax rise has been scrapped as part of a broad set of measures aiming for growth. 

European Markets  

The Euro Stoxx 50 is currently down 2.11% to 3,354, the DAX is down 2.01% at 12,276 whilst the CAC 40 lost 1.97%, reaching 5,801. Eurozone PMI data on Friday fell to its lowest level since January 2021 and showed eurozone business activity suffering a large contraction and price pressures increasing. 

Fixed Income  

Yields rose across the board following the raft of global central bank rate increases, notably more so in the UK as these impacts were combined with the largest set of tax cuts in half a century. 


Brent Crude fell a further 4.51% this week, as fears of an economic slowdown once again lower the outlook for global oil demand.  


The Week Ahead   


Tuesday – US durable goods, BoJ MPC minutes 

Wednesday – Australian retail sales 

Thursday – German CPI, US GDP,  

Friday – China PMI, UK GDP, German Retail Sales, Eurozone CPI 

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