Second quarter GDP was downgraded in the Eurozone last week in what was the latest sign of economic troubles on the Continent. A previously calculated +0.3% growth figure was surprisingly lowered to just +0.1%, reflective of weaker exports and consumption[1]. Whilst France and Italy reported modest GDP growth in the period, Germany contracted with its critical car manufacturing industry continuing to struggle. Each of the major European exchanges recorded weekly declines with the broad MSCI Europe ex UK index concluding the week -0.9% lower.
Equity markets in general struggled last week. In the US which had a shortened trading week due to the Labor Day holiday, the S&P500 fell by -1.3% with several of its major constituents such as Apple and NVIDIA retreating[2]. Treasury yields also edged higher with the 10-year dated security adding 7 basis points (bps) to 4.26% on the back of positive jobs data on Thursday. In Asia, the Nikkei 225 and Shanghai Composite declined by -0.3% and -0.5% respectively with both markets hampered by economic concerns. Bucking the negative trend seen elsewhere, the FTSE100 rose by +0.2% thanks in part to Bank of England (BoE) Governor Andrew Bailey who stated that Bank is close to reaching the top of its interest rate cycle. Despite those comments, gilts had a largely uneventful week with the 10-year yield unchanged at 4.43%.
Moving to commodities, oil prices rallied once again with Brent Crude jumping by +2.3% to $90.70 a barrel. That’s the highest level for nine months as production cut extensions by both Saudi Arabia and Russia added to supply concerns. Between them, the two countries will maintain cuts of 1.3m barrels through to the end of the year. Copper slipped by -3.0% to $8,229 a tonne following weak import data from China with gold also positing a negative week, the precious metal recording a -0.9% decline to $1,922 an ounce.
Week Ahead
| Day | Country | Measure | Period | Forecast | Previous |
| Monday | - | - | - | - | - |
| Tuesday | Eurozone | ZEW Economic Sentiment Indicator | September | -6.20 | -5.50 |
| UK | Unemployment Rate | July | 4.30% | 4.20% | |
| Wednesday | Eurozone | Industrial Production MoM | July | -0.70% | 0.50% |
| UK | GDP QoQ Monthly | July | -0.20% | 0.50% | |
| UK | Industrial Production MoM | July | -0.60% | 1.80% | |
| US | CPI YoY | August | 3.60% | 3.20% | |
| Thursday | Eurozone | European Central Bank Policy Meeting | September | - | - |
| Japan | Industrial Production MoM | July | -2.00% | -2.00% | |
| US | PPI YoY | August | 1.20% | 0.80% | |
| US | Retail Sales MoM | August | 0.20% | 0.70% | |
| Friday | China | Industrial Production YoY | August | 3.90% | 3.70% |
| China | Retail Sales YoY | August | 3.00% | 2.50% | |
| China | Unemployment Rate | August | 5.30% | 5.30% | |
| US | Industrial Production MoM | August | 0.10% | 1.00% | |
| US | University of Michigan Consumer Sentiment | September | 69.20 | 69.50 |
Source: Refinitiv Workspace, 11/09/23
[1] Eurostat, 11/09/23
[2] T. Rowe Price, 11/09/23
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