Written by Ilaria Massei.

Last week, equity markets ended mixed with the MSCI All Country World Index +0.1% (in GBP terms), following a week with a relatively light economic calendar. In the US, the weekly jobless claims’ report brought signs of growing weakness in the labour market, but investors appeared divided on whether to treat this as good news. Some viewed this release as a sign that the Federal Reserve might stop hiking rates whereas others viewed it as a further step towards an upcoming recession. Weekly jobless claims rose a bit more than expected and also continuing jobless claims, which measure unemployed people who have been receiving unemployment benefits for a prolonged period, rose well above market expectations, reaching its highest level since November 2021.

In Europe, we are starting to see signs of divergence within policymakers with regards to the decision of hiking rates.  The minutes of the March meeting of the European Central bank (ECB) showed policymakers were split. The majority voted to hike rates, however, some members said they would prefer a pause until calm returns in financial markets.

In the UK, the annual UK consumer price growth in March slowed by less than expected to 10.1% from 10.4% in February, driven by surging food and drink prices. Data from the Office for National Statistics (ONS) indicated that wage growth also showed few signs of moderating in the three months through February. At the last meeting, the 0.25% interest rate rise was passed with seven in favour and two who wanted to hold rates still. However, these continued inflationary forces could lead the Bank of England to raise interest rates once more in its May meeting.

Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 24th April 2023.
© 2023 YOU Asset Management. All rights reserved.