The infoshot to help kick-start your week
Last Week
- The Bank of England decided to maintain its benchmark interest rate at 5.25%, but the meeting minutes hinted at a potential shift towards easing, with some members of the Monetary Policy Committee expressing a leaning towards rate cuts soon. This triggered market movements, pushing the probability of a rate cut in August above 50%. Governor Andrew Bailey’s remarks leaned towards a dovish stance, emphasising the significance of recent economic data. Despite inflation reaching the BOE’s 2% target, concerns persist about stubbornly high services sector inflation and wage growth. These factors are pivotal in shaping expectations for a cautious, gradual approach to future rate adjustments beyond August, amidst ongoing economic uncertainties.
- The European Union and China have agreed to initiate discussions regarding the EU’s proposal to implement tariffs on electric vehicles imported from China. Earlier this month, the EU announced its intention to impose tariffs of up to 48% on Chinese EVs starting in July, which has heightened trade tensions. The EU has launched several investigations into China, alleging unfair trade practices, including significant state subsidies. In response, Beijing has issued warnings that could impact European goods.
- In a volatile first half of the year, US Treasuries have nearly erased losses, with a Bloomberg index showing just a 0.1% decline for 2024, rebounding sharply from a 3.4% drop in April. Yields ticked higher in London trading as US markets reopened after a holiday, with upcoming data on jobless claims and housing expected to bolster the bond market rally. Investors are betting that moderating US inflation will prompt the Federal Reserve to cut interest rates sooner and more aggressively than previously anticipated, capping further increases in Treasury yields. Bond market volatility has subsided, reflecting growing alignment between market expectations and Fed policy projections.
Market Pulse
Coming Up
- UK BoE Governor Bailey Speech, Thursday 27th June 2024 at 10:30am.
- US GDP Data (Q1), Thursday 27th June 2024 at 1:30pm.
- UK GDP Data, Friday 28th June at 7:00am
- US Core PCE Price Index, Friday 28th June at 1:30pm.
Notice:
For professional advisers only, Copia does not provide financial advice, and the contents of this document should not be taken as such. The performance of each asset class is represented by certain Exchange Traded Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at previous Thursday 4:30pm UK close. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated, but is not an indicator of potential maximum loss for other periods or in the future.Open document settingsOpen publish panel
