After a strong month for most financial assets in January, the final three weeks of February proved to be more of struggle.
February started with anticipated rate increases from the US Federal Reserve, the European Central Bank and the Bank of England. All three were keen to re-emphasise their inflation-fighting zeal.
The start of 2023 was a positive one for most asset classes. The rising tide rally in risk assets that commenced in mid-October 2022 stalled in December, but returned in January floating all boats.
The good news is that inflation is falling in developed markets. A warm winter in Europe will have a significant impact on lower inflation and be a boost for European businesses. China’s re-opening should be good for other markets too.
The final quarter of 2022 proved to be a partial offset to the rest of the year’s poor outcome for investors. However, December couldn’t match November’s rebound in financial asset prices that started in the second half of October.
Financial markets took stock of November’s rally ahead of key rate decisions from the US Federal Reserve, European Central Bank and the Bank of England due in the week commencing 12 December.
Has the peak of US inflation passed? Does current UK and European inflation represent their peaks? These are some of the challenges facing the investor.
November has been characterised by a continuation of the rally in risk assets that started in October. The month started with official interest rate increases from the US Federal Reserve and the Bank of England.
Developed economies’ central banks have remained centre stage in October, with investors mulling how much they will tighten monetary policy.
History will likely recall with some incredulity, how an incoming Prime Minister managed to caused so much market chaos in the UK currency and bond markets
September has magnified the rollercoaster of emotions for investors as financial markets oscillated widely
The key financial event so far in September was the US Consumer Price Index (CPI) release on 13 September.