Calmer markets at the start of the week

Calmer markets at the start of the week

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Today (Monday) things are calmer in the UK markets with the Pound and UK stocks strongly higher and gilt yields lower after new Chancellor, Jeremy Hunt, announced a reversal of nearly all the tax cuts in the government’s recent mini-budget. US stocks are also up following positive third-quarter earnings reports from major US companies including Bank of America.  

 

Last week, US CPI numbers came in higher than expected with core CPI hitting 6.6%, a 40-year high. There was nothing in the data that would encourage the Fed to change its “higher for longer” stance on interest rates. US stocks actually managed to rally on Thursday despite the CPI disappointment but gave the gains back on Friday. The 10-year U.S. Treasury yield ended the week above 4%, the first time that’s happened since 2008.  

 

Surprisingly, the price of oil was lower last week after the OPEC+ decision to cut production. The Biden administration claims that Saudi Arabia put pressure on other OPEC members to agree to the cuts in output and has accused the Organisation of “aligning with Russia”.

UK Market Chart 14th October 2022

US Market Chart 14th October 2022

US Risk Barometer 14th October 2022

Europe Risk Barometer 14th October 2022

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