True Potential Morning Markets

Paul Durrans, Investment Director, looks at the recent UK jobs data which has unemployment at 4% with the number of people in jobs at a record level. This puts the labour market in a strong position ahead of the budget in a little over two weeks. However, the Bank of England is treating this data with caution given concerns over the quality of the data. UK wage growth however is unaffected by the same data quality issues and came in at +4.9%, slightly below what economists expected. Paul concludes be discussing what this means for the Bank of England.

This week, our eyes turn to the UK where the last round of major data points is released ahead of the governments budget announcement. Kevin Kidney, Head of Asset Allocation, looks at the market expectation of UK inflation falling below 2% in this weeks print which would put it below the Bank of England target and at its lowest point since April 2021. Global bond markets are already signalling that there could be modest inflation risks ahead which could be compounded by announcements in the UK budget. 

This week, Paul Durrans, Investment Director and George Bell, Portfolio Manager, look at the recent modest improvement in the UK economy after two months of stagnation. Also in focus this week was the US which saw a new record high in equity markets but also saw some volatility within the bond market. China, with its 5% growth target, is facing challenges in the property sector but with more fiscal stimulus promised, markets will be paying close attention this weekend for the size and how the stimulus will be spent.

Investment Director, Paul Durrans, covers the S&P 500 reaching a new record-high and examines how 2024's interest rate cuts in the US are affecting global markets. While fears of a slowing US economy emerged, stronger-than-expected employment data pointed to economic resilience. With further US rate cuts anticipated over the next year, equity markets are rising, but bond markets are showing slight weakness. US inflation is back in focus today with expectations for headline inflation to move below 2.5%. Watch now to stay ahead of these critical market trends.

With the US Presidential Election less than a month away Sebastian Mackay, Investment Director, takes a look at the market expectations for each outcome. He assess the current state of US economy, what markets are currently pricing in and how victory for Trump or Harris could alter the country’s current interest rate cycle.

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%.