{"id":6118,"date":"2022-08-17T09:45:54","date_gmt":"2022-08-17T08:45:54","guid":{"rendered":"https:\/\/sarasinandpartners.com\/row\/?p=6118"},"modified":"2022-08-17T09:45:54","modified_gmt":"2022-08-17T08:45:54","slug":"the-week-in-markets-17-august-2022","status":"publish","type":"post","link":"https:\/\/sarasinandpartners.com\/row\/think\/the-week-in-markets-17-august-2022\/","title":{"rendered":"The week in markets – 17 August 2022"},"content":{"rendered":"

Welcome to the weekly macroeconomic round-up, where we spotlight a few of the most significant events in the last few weeks.<\/h3>\n

US inflation data softer than forecast<\/strong><\/h3>\n

US CPI data was lower than expected in July, coming in flat for the month and substantially lower for the year at 8.5% vs June\u2019s annual figure of 9.1%. The numbers remain historically high, but the sharp monthly fall in US gasoline prices (c.-7%) and airfares (c.-8%) was more pronounced than predicted, prompting speculation that we may be near peak inflation.<\/p>\n

Looking into the data, however, shows a broadening out of price increases. This suggests that inflation will remain higher for longer, despite easing in categories that saw the biggest annual increases, such as energy. The Atlanta Fed breaks down CPI into \u2018flexible\u2019 prices and \u2018sticky\u2019 prices, which tend to fall slowly. Healthcare and rental costs are two \u2018sticky\u2019 examples that continue to rise, and rental costs are likely to experience a further step-increase in September, when rents in the US North-East are re-set.<\/p>\n

The cost of labour per unit of goods and services produced by US companies rose by 9.5% over the year to July. Q2\u2019s robust company profits indicate that these price rises are being passed on to consumers, further embedding inflation. Although the US labour market currently appears resilient, resolutely bearish consumer sentiment and near-inversion of the US Treasury yield show that markets put the likelihood of an impending recession at c.75% and rising.<\/p>\n

There is growing speculation that the US Federal Reserve (Fed) will not respond to an economic slowdown with immediate interest rate cuts, but delay cutting in order to avoid a repeat of the resurgence of inflation seen in the 1960s and 1970s. More information should follow the Fed\u2019s Jackson Hole Economic Symposium in August.<\/p>\n

UK economy contracts in Q2 as the cost of living crisis hits consumers<\/strong><\/h3>\n

The UK economy shrank by 0.1% in Q2 after a rise of 0.7% in Q1. The fall was mainly driven by lower consumer and healthcare spending, and June\u2019s extra bank holiday to mark the Queen\u2019s Platinum Jubilee may also have contributed to the decline.<\/p>\n

The UK economy is now 0.6% larger than it was before the onset of the pandemic, and GDP might continue to bounce during the current quarter, led by hospitality and tourism. Longer-term, an increase in the energy price cap in October is likely to dampen consumer demand further and push the economy into a recession.<\/p>\n

China\u2019s central bank cuts rates as the economy shows signs of a slowdown<\/strong><\/h3>\n

In stark contrast to other major central banks, the People\u2019s Bank of China (PBOC) cut interest rates by 0.1% in response to July\u2019s slowdown in economic momentum and credit growth. This is the second time this year that the PBOC has stepped in to stimulate growth, which has faltered due to China\u2019s dynamic zero-COVID policy and fragile housing market.<\/p>\n

China\u2019s zero-COVID policy has resulted in rolling lockdowns that have hit consumer demand, but output has been maintained by requiring some workers to live in their factories, ensuring that exports and infrastructure continue to be sources of growth.<\/p>\n

China\u2019s property market continues to suffer following a default by its largest construction company, Evergrande, and some borrowers are refusing to pay mortgage repayments on unfinished properties. The fall in annual property sales has steepened from -18% in June to -29% in July, while the decline in annual construction remained unchanged since June at -45%. Top-line credit growth is now slowing as borrowing demand contracts, with private credit growth remaining below levels seen in January.<\/p>\n

Market review<\/strong><\/h3>\n

It was a positive week in almost every global equity market. The MSCI ACWI rose almost 3%, while the S&P 500 clocked up the largest weekly gain, rising 3.3% but still down 9% for the year to date. China was the only major market to see a decline, albeit marginal, down 0.3% as measured by the MSCI China index.<\/p>\n

Bond markets fared less well, with every gilt index ending the week in negative territory. Longer-dated gilts ended the week down 2.2% as measured by the BAML 10+ Year Gilt Index. However, the iShares 7-10 Year Treasury ETF ended the week flat.<\/p>\n

Ongoing concerns over energy supplies, particularly in Europe, saw the benchmark for oil, Brent Crude, increase by over 3%.<\/p>\n

\n

Important information<\/strong><\/p>\n

All details in this article are provided for information purposes only and should not be misinterpreted as investment advice or taxation advice.<\/p>\n

Where the data in this article comes partially from third party sources the accuracy, completeness or correctness of the information contained in this publication is not guaranteed, and third-party data is provided without any warranties of any kind.\u00a0 Sarasin & Partners LLP shall have no liability in connection with third party data.<\/p>\n

\u00a9 2022 Sarasin & Partners LLP \u2013 all rights reserved.\u00a0 This article can only be distributed or reproduced with permission from Sarasin & Partners LLP.<\/p>\n","protected":false},"excerpt":{"rendered":"

Welcome to the weekly macroeconomic round-up, where we spotlight a few of the most significant events in the last few weeks. US inflation data softer than forecast US CPI data was lower than expected in July, coming in flat for the month and substantially lower for the year at 8.5% vs June\u2019s annual figure of...<\/p>\n","protected":false},"author":73,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28],"tags":[],"coauthors":[191],"class_list":["post-6118","post","type-post","status-publish","format-standard","hentry","category-markets"],"yoast_head":"\nThe week in markets - 17 August 2022 - Sarasin & Partners Global<\/title>\n<meta name=\"description\" content=\"Welcome to the weekly macroeconomic round-up. It was a positive week in almost every global equity market. The MSCI ACWI rose almost 3%...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/sarasinandpartners.com\/row\/think\/the-week-in-markets-17-august-2022\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The week in markets - 17 August 2022 - Sarasin & Partners Global\" \/>\n<meta property=\"og:description\" content=\"Welcome to the weekly macroeconomic round-up. It was a positive week in almost every global equity market. The MSCI ACWI rose almost 3%...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/sarasinandpartners.com\/row\/think\/the-week-in-markets-17-august-2022\/\" \/>\n<meta property=\"og:site_name\" content=\"Sarasin & Partners Global\" \/>\n<meta property=\"article:published_time\" content=\"2022-08-17T08:45:54+00:00\" \/>\n<meta name=\"author\" content=\"Anastasia Jennings\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@sarasinpartners\" \/>\n<meta name=\"twitter:site\" content=\"@sarasinpartners\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Anastasia Jennings\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/think\\\/the-week-in-markets-17-august-2022\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/think\\\/the-week-in-markets-17-august-2022\\\/\"},\"author\":{\"name\":\"Anastasia Jennings\",\"@id\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/#\\\/schema\\\/person\\\/22d3a1e8fd3843c0c08eb2968ee7cc43\"},\"headline\":\"The week in markets – 17 August 2022\",\"datePublished\":\"2022-08-17T08:45:54+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/think\\\/the-week-in-markets-17-august-2022\\\/\"},\"wordCount\":821,\"publisher\":{\"@id\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/#organization\"},\"articleSection\":[\"Markets\"],\"inLanguage\":\"en-GB\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/think\\\/the-week-in-markets-17-august-2022\\\/\",\"url\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/think\\\/the-week-in-markets-17-august-2022\\\/\",\"name\":\"The week in markets - 17 August 2022 - Sarasin & Partners Global\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/#website\"},\"datePublished\":\"2022-08-17T08:45:54+00:00\",\"description\":\"Welcome to the weekly macroeconomic round-up. It was a positive week in almost every global equity market. The MSCI ACWI rose almost 3%...\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/think\\\/the-week-in-markets-17-august-2022\\\/#breadcrumb\"},\"inLanguage\":\"en-GB\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/think\\\/the-week-in-markets-17-august-2022\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/think\\\/the-week-in-markets-17-august-2022\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"The week in markets – 17 August 2022\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/#website\",\"url\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/\",\"name\":\"Sarasin & Partners Global\",\"description\":\"Sarasin & Partners\",\"publisher\":{\"@id\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-GB\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/#organization\",\"name\":\"Sarasin & Partners Global\",\"url\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-GB\",\"@id\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/wp-content\\\/uploads\\\/2019\\\/12\\\/sarasinandpartners.svg\",\"contentUrl\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/wp-content\\\/uploads\\\/2019\\\/12\\\/sarasinandpartners.svg\",\"width\":532,\"height\":197,\"caption\":\"Sarasin & Partners Global\"},\"image\":{\"@id\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/#\\\/schema\\\/logo\\\/image\\\/\"},\"sameAs\":[\"https:\\\/\\\/x.com\\\/sarasinpartners\",\"https:\\\/\\\/www.linkedin.com\\\/company\\\/sarasin-&amp;-partners\"]},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/sarasinandpartners.com\\\/row\\\/#\\\/schema\\\/person\\\/22d3a1e8fd3843c0c08eb2968ee7cc43\",\"name\":\"Anastasia Jennings\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"The week in markets - 17 August 2022 - Sarasin & Partners Global","description":"Welcome to the weekly macroeconomic round-up. It was a positive week in almost every global equity market. The MSCI ACWI rose almost 3%...","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/sarasinandpartners.com\/row\/think\/the-week-in-markets-17-august-2022\/","og_locale":"en_GB","og_type":"article","og_title":"The week in markets - 17 August 2022 - Sarasin & Partners Global","og_description":"Welcome to the weekly macroeconomic round-up. It was a positive week in almost every global equity market. The MSCI ACWI rose almost 3%...","og_url":"https:\/\/sarasinandpartners.com\/row\/think\/the-week-in-markets-17-august-2022\/","og_site_name":"Sarasin & Partners Global","article_published_time":"2022-08-17T08:45:54+00:00","author":"Anastasia Jennings","twitter_card":"summary_large_image","twitter_creator":"@sarasinpartners","twitter_site":"@sarasinpartners","twitter_misc":{"Written by":"Anastasia Jennings","Estimated reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/sarasinandpartners.com\/row\/think\/the-week-in-markets-17-august-2022\/#article","isPartOf":{"@id":"https:\/\/sarasinandpartners.com\/row\/think\/the-week-in-markets-17-august-2022\/"},"author":{"name":"Anastasia Jennings","@id":"https:\/\/sarasinandpartners.com\/row\/#\/schema\/person\/22d3a1e8fd3843c0c08eb2968ee7cc43"},"headline":"The week in markets – 17 August 2022","datePublished":"2022-08-17T08:45:54+00:00","mainEntityOfPage":{"@id":"https:\/\/sarasinandpartners.com\/row\/think\/the-week-in-markets-17-august-2022\/"},"wordCount":821,"publisher":{"@id":"https:\/\/sarasinandpartners.com\/row\/#organization"},"articleSection":["Markets"],"inLanguage":"en-GB"},{"@type":"WebPage","@id":"https:\/\/sarasinandpartners.com\/row\/think\/the-week-in-markets-17-august-2022\/","url":"https:\/\/sarasinandpartners.com\/row\/think\/the-week-in-markets-17-august-2022\/","name":"The week in markets - 17 August 2022 - Sarasin & Partners Global","isPartOf":{"@id":"https:\/\/sarasinandpartners.com\/row\/#website"},"datePublished":"2022-08-17T08:45:54+00:00","description":"Welcome to the weekly macroeconomic round-up. It was a positive week in almost every global equity market. The MSCI ACWI rose almost 3%...","breadcrumb":{"@id":"https:\/\/sarasinandpartners.com\/row\/think\/the-week-in-markets-17-august-2022\/#breadcrumb"},"inLanguage":"en-GB","potentialAction":[{"@type":"ReadAction","target":["https:\/\/sarasinandpartners.com\/row\/think\/the-week-in-markets-17-august-2022\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/sarasinandpartners.com\/row\/think\/the-week-in-markets-17-august-2022\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/sarasinandpartners.com\/row\/"},{"@type":"ListItem","position":2,"name":"The week in markets – 17 August 2022"}]},{"@type":"WebSite","@id":"https:\/\/sarasinandpartners.com\/row\/#website","url":"https:\/\/sarasinandpartners.com\/row\/","name":"Sarasin & Partners Global","description":"Sarasin & Partners","publisher":{"@id":"https:\/\/sarasinandpartners.com\/row\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/sarasinandpartners.com\/row\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-GB"},{"@type":"Organization","@id":"https:\/\/sarasinandpartners.com\/row\/#organization","name":"Sarasin & Partners Global","url":"https:\/\/sarasinandpartners.com\/row\/","logo":{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/sarasinandpartners.com\/row\/#\/schema\/logo\/image\/","url":"https:\/\/sarasinandpartners.com\/row\/wp-content\/uploads\/2019\/12\/sarasinandpartners.svg","contentUrl":"https:\/\/sarasinandpartners.com\/row\/wp-content\/uploads\/2019\/12\/sarasinandpartners.svg","width":532,"height":197,"caption":"Sarasin & Partners Global"},"image":{"@id":"https:\/\/sarasinandpartners.com\/row\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/x.com\/sarasinpartners","https:\/\/www.linkedin.com\/company\/sarasin-&amp;-partners"]},{"@type":"Person","@id":"https:\/\/sarasinandpartners.com\/row\/#\/schema\/person\/22d3a1e8fd3843c0c08eb2968ee7cc43","name":"Anastasia Jennings"}]}},"_links":{"self":[{"href":"https:\/\/sarasinandpartners.com\/row\/wp-json\/wp\/v2\/posts\/6118","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sarasinandpartners.com\/row\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sarasinandpartners.com\/row\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sarasinandpartners.com\/row\/wp-json\/wp\/v2\/users\/73"}],"replies":[{"embeddable":true,"href":"https:\/\/sarasinandpartners.com\/row\/wp-json\/wp\/v2\/comments?post=6118"}],"version-history":[{"count":0,"href":"https:\/\/sarasinandpartners.com\/row\/wp-json\/wp\/v2\/posts\/6118\/revisions"}],"wp:attachment":[{"href":"https:\/\/sarasinandpartners.com\/row\/wp-json\/wp\/v2\/media?parent=6118"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sarasinandpartners.com\/row\/wp-json\/wp\/v2\/categories?post=6118"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sarasinandpartners.com\/row\/wp-json\/wp\/v2\/tags?post=6118"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/sarasinandpartners.com\/row\/wp-json\/wp\/v2\/coauthors?post=6118"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}