European equities were higher last week. The UK’s FTSE 100 put in a particularly good performance – up more than 3%. Asia was mixed, and the US, flat to lower.
The European Central Bank (ECB) raised interest rates again last week. This hike of 0.25% lifted rates to 4.5%, the highest since 1999. There was an indication that an end to the cycle could be in sight though; the ECB said “interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target”. European equities rallied strongly following the statement.
Other Central Banks will be the focus this week with the BoE, US Fed and BoJ all meeting.
The Fed will announce its decision on Wednesday and is expected to leave rates unchanged. Last week’s US inflation data saw headline CPI move higher (0.6% in August) but Core CPI (less food & energy) only rose 0.3%. The recent rise in the price of oil is largely responsible for the difference and this mainly due to Saudi Arabia and Russia extending production cuts for the rest of the year.
In the UK, data from the ONS showed that the economy shrank by 0.5% in July which was worse-than-forecasted. Unemployment increased to 4.3% over the three months to end July, only slightly up from 4.2% over the previous quarter but helpful to the Bank of England in its fight against inflation.
UK Market Chart 15th September 2023
US Market Chart 15th September 2023
US Risk Barometer 15th September 2023
Europe Risk Barometer 15th September 2023
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