- The UK stock-market bounced back last week after falling the previous week.
- Data from the ONS showed that government borrowing fell to £24.3 billion in May, less than expected, but still the second highest borrowing on record for the month of May
- PMI numbers for the UK were slightly lower than those for May but continue to indicate a strong momentum of expansion. However, Chris Williamson of IHS Markit warned that “inflation worries have continued to intensify” and commented that the data hints strongly that “consumer price inflation has much further to rise after already breaching the Bank of England’s 2% target in May”.
- The Bank of England kept interest rates at 0.1%. Inflation is running at 2.1%, year to May, but the Monetary Policy Committee now expects it to rise above 3% this year. Like the US Fed, the UK central bank is playing down concerns and insist this is “transitory”.
- Our Breadth indicator turned back to positive but our Momentum Indicator ticked lower.
- The US stock-market had its strongest week in months last week. Global market sentiment improved and stocks bounced back strongly after the previous week’s losses. Concerns that the Fed will raise rates sooner than previously expected and start withdrawing stimulus seemed to recede.
- Markets were lifted on Tuesday after US Fed Chair Jerome Powell restated the view that the recent spike in inflation would be temporary and that the central bank would only raise rates if it saw “actual evidence of actual inflation”.
- On Thursday, President Joe Biden announced a new infrastructure plan saying “we have a deal” with Republicans. He said new spending worth $579 billion will create millions of jobs. For now the agreement does not include for climate change plans and those on the left of his party said the plan was “paltry”.
- Our Breadth Indicator stayed negative this week and our Momentum Indicator ticked lower again.
The Big Picture 25th June 2021
Market Sentiment 25th June 2021
U.S. Risk Barometer 25th June 2021
Europe Risk Barometer 25th June 2021
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