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Weekly Market Wrap 30/06/2023

The UK economy continues to grow, whist Germany continues to feel the effects of persistent high inflation. Jerome Powell’s comments fuel investor concerns over interest rates, whilst European CPI surprises.

UK Market  

The UK market ended the week higher. The Office for National Statistics confirmed that the UK economy grew by 0.1% in Q1 of 2023, showing that the UK has continued to escape recession. However, higher interest rates and persistent high inflation are likely yet to have had their full impact on the UK’s economy. UK houses prices fell by the largest amount since 2009 over the last 12 according to a report by Nationwide. The report showed that the average house price was down 3.5% compared to June last year, the slowdown in demand for new housing is likely due to rapid interest rate rises from the Bank of England. With over 2 million fixed rate mortgages expected to end in 2024, the increased borrowing costs are still likely to have further affects on the property market.  

US Markets

The S&P 500 is set to end the week up 1.11% at 4,396 and the NASDAQ is up 0.73% at 13,591. US stocks jumped on Tuesday after consumer confidence and capital goods orders data came in higher than expected, boosting hopes that the US economy could remain strong despite the Fed’s rapid interest rate rises. Consumer confidence came in at 109.7 (est. 104) whilst nondefense capital goods orders grew 0.7%, when a flat reading was expected. When speaking on Wednesday Fed Chairman Jerome Powell reinforced that fed officials still see one or two more rate rises occurring in 2023, after the Fed paused recent hikes at its previous meeting in order to allow more time to assess the state of the US economy. Markets are currently pricing one more rate increase at the Fed’s July meeting, with rates then being held at 5.25-5.50% until 2024.

European Markets 

The Euro Stoxx 50 is currently up 1.23% at 3,997, the DAX is 1.85% higher at 16,122, whilst the CAC 40 has gained 3.19% to 7,390. German unemployment unexpectedly rose in June, increasing to 5.7% when a flat reading at 5.6% was expected. This data follows the news that the German economy had entered a recession after seeing economic contractions in Q4 of 2022 and Q1 of 2023, due to continued high inflation and a slowdown in consumer spending. European CPI data for June came in slightly lower than expected at 5.5% (est 5.6%) and down from 6.1% in May. Inflation excluding energy and food prices fell slightly to 6.8% from 6.9%. The continued easing of inflation in the eurozone will give investors hope of improving economic conditions, however, is unlikely to change the European Central Bank’s current path for rates, which is expected to deliver two further hikes in July and September. Tensions within Russia have now calmed after a short lived coup against the Russian government by the Wagner group was ended swiftly.

Fixed Income

Yields on 10-Year US government bonds rose by 0.14% this week to 3.84%, after Jerome Powell’s comments around fed officials seeing further hikes pushed investor rate expectations higher.


Brent Crude is set to end the week up 1.56% at $75 per barrel, however oil prices are set to see a fourth consecutive quarterly decline as concern grows over the outlook for the global economy and demand.


The Week Ahead

Monday – US Manufacturing PMI

Tuesday – RBA Interest Rate Decision

Wednesday – FOMC Minutes

Thursday – US Unemployment & Initial Jobless Claims

Friday – US Nonfarm Payrolls

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