Global stock-markets were lower last week. Investors were nervous as a potential US government shut-down loomed with Congress struggling to find consensus on a short-term funding deal. Thankfully, that scenario was averted on the weekend and President Biden signed the deal into law minutes before the deadline.
Investors now re-focus on the Fed’s next move and anxiety remains high after the yield on the US 10-year Treasury rose above 4.6% last week and remains as high at the start of this week. The US central bank kept interest rates on hold in September but indicated there could be another rate hike before the end of the year. The recent rise in oil prices has not been helping that issue and a new 12-month price high was reached last week.
There was a positive on the inflation front though. The annual rate of core PCE (the Fed’s preferred inflation indicator) came in at 3.9% for August, the first measurement in over two years below 4%.
Inflation in the Eurozone also fell to its lowest level in two years with data for September falling sharply from August.
In the UK, data from the ONS showed retail sales increased in August, reversing July’s decline. The yield on the 10-yr Gilt rose back above 4.5% and the Pound fell to its lowest level, versus the US Dollar, since mid-March.
The most closely-watched data point this week will be Friday’s US employment report. Investors will keen to see if indications of slowing US jobs growth continues.
UK Market Chart 29th September 2023
US Market Chart 29th September 2023
US Risk Barometer 29th September 2023
Europe Risk Barometer 29th September 2023
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