Portfolio Manager, George Bell, covers data from the US and the impact on bond markets. For the first time since mid Summer, the US treasury is above 4% after the surprisingly strong employment data released on Friday. In turn, the market has moderated their expectations of another 0.50% rate cut in November, but still expecting two 0.25% between now and the end of the year, followed by a further 1.0% worth of cuts in 2025.

With announcements from the October Budget looming, Head of Asset Allocation, Kevin Kidney, reviews how the UK’s economic growth could be impacted by impending budget announcements. With further commentary on how positive US employment suggests the US economy is stronger than markets perceived, how will the future growth of both the US and UK economies impact markets?

This week, Paul Durrans, Investment Director and Sam Elliott, Investment Analyst, summarise financial markets and monetary policy changes that could impact your money. China has continued to be in focus for equity markets as investors digest the larger than expected stimulus measures. Elsewhere they discuss the recent US labour market reports and how equity and bonds markets have reacted.

Closer to home, the Bank of England suggested it may catch-up with the US with more aggressive interest rate cuts, although there appears to be some disagreement between the central bank's chief economist and Governor. How do these changes impact diversified investors?

Investment Director, Sebastian Mackay, discusses the Bank of England suggesting that more aggressive interest rate cuts will occur in near future. Moreover, why does the UK need an interest rate cut, and how will this impact the markets, and more importantly, your money? Find out on this episode of Morning Markets.

#investing #Inflation #interestrates #MorningMarkets #TruePotential 

Matt Henderson, Portfolio Manager, looks at the data from Europe that puts headline inflation at 1.8%, below the European Central Bank target of 2%. How will this change expectation for further cuts from the central bank? In the US manufacturing remains in contraction but the underlying data provides some mixed signals. Dominating global headlines is the conflict in the Middle East which has caused a defensive shift from investors and caused a spike in oil prices which are up 3.5%.

George Bell, Portfolio Manager, looks at the latest Tankan survey from Japan and the cautious optimism seen in the manufacturing sector. Large manufacturers plan to increase capital expenditure by 10.6% in the year ending March 2025. The report was taken ahead of the announcement of the massive stimulus package announced in China which should benefit Japanese manufacturers as a key trading partner. In the US, Federal Reserve Chairman, Jerome Powell, has left the door open to two further 0.25% cuts before year end following the initial 0.5% cut in September.

Kevin Kidney, Head of Asset Allocation, looks at the remarkable performance of the Chinese stock market last week which saw a near 20% rise in most major equity markets. As we look to the week ahead, German and Italian inflation data will be a strong indicator of whether the European Central Bank will continue its rate cuts in Q4. We get US survey data on manufacturing and services this week which could potentially paint a more optimistic picture from US businesses after the recent 0.5% cut from the Federal Reserve.

This week, Kevin Kidney, Head of Asset Allocation and Sebastian Mackay, Investment Director, take a look at some equity markets which have reached all time highs. US and German equities reached new highs this week, but tell slightly different stories. The US growth dominance continues, boosting asset prices and supported by lower inflation and lower interest rates. German equities reflect buoyant global growth, given the more outward facing economy there. The surprise stimulus announcements from China have boosted all stock markets this week, but particularly Europe within the G7 economies. The lower oil prices we are seeing will also boost consumer spending power, given the feed through into petrol pumps.

Today, Chris Leyland, Director of Investment Strategy, looks at the recent shifts in oil markets and the wider global events that are affecting supply and demand. From Saudi Arabia who could drop their $100 a barrel target on barrels of oil to increase market share, to agreements in a divided Libya on a Central Bank Manager which could aid in the process of managing oil revenues and help with distribution issues. Later today we also have Federal Reserve members including Chairman Powell which could provide insight into future policy after the 0.5% interest rate cut.

Matt Henderson, Portfolio Manager, covers the announcement of the People’s Bank of China implementing an interest rate cut of 0.3%. This comes off the back of announcements earlier this week and is part of a coordinated strategy to boost the economy. Where this may not seem like a large move, it is actually a record interest rate cut for China’s central bank. This has caused a rally in Chinese equities which are up 7% from the announcements, but will it be enough to revitalise the Chinese economy and hit the central bank’s target of 5% growth?