This week

In what has been a truncated week in domestic markets due to the celebration of Good Friday at the end of the week, there has still been plenty to keep those in the City busy. The week has been a busy one for accountants and golf enthusiasts alike with some counting down to the end of the tax year, whilst some count down to the beginning of the Masters Golf.

The shortened week has even proven busy for economists as a slew of economic data releases has been enough to ruin those daydreams of appearing at Augusta this weekend. Teeing off the week was a slew of Manufacturing PMI readings, covering all major western economies. Perhaps the most interesting was the reading of 47.9 for the UK, showing the sector had fallen back into contractionary territory after a brief increase in February. Although domestic manufacturing may currently be in the rough, the was some good news on the price and supply fronts, as cost inflation eased, and average supplier lead times improved to the greatest extent in survey history.

From drivers to driving, interesting data from US on Monday showed that car sales had increased 7.5% during the first quarter of 2023 as supplies improved and the global shortage of computer chips started to wane. General Motors’ sales jumped 17.6% over a weak first quarter last year as Buick brand deliveries doubled. The company said it picked up 1.5% of market share. GM’s dealer inventory rose 50% in the quarter to more than 412,000 as production increased. Meanwhile Nissan sales leaped 17.3%, and Honda, which struggled to obtain chips for their cars last year, posted an 11.7% increase.

The US Bureau of Labor Statistics’ release of job openings data on a Wednesday is par for the course for many economists, however this week’s numbers showed that the US Federal Reserve’s rate rises may be finally influencing the labour market. The numbers showed that job openings dropped to their lowest level in nearly two years during February, suggesting that labour market conditions were finally easing, a piece welcome news for the Federal Reserve as it considers whether to stay the course with its interest rate hiking cycle. Despite the larger than expected decline in job vacancies, the US labour market remains strong, with 1.7 job openings for every unemployed person, although down from 1.9 in January. 

From divots to Fed pivots, the coming weeks should be fascinating as both golfers and central banks do their best to avoid any potential hazards as we head into the Spring months.

Next week

With markets in the UK, Europe and US all closed in observance of Easter Monday, the coming week should be slightly subdued. However, by Tuesday it will be the British Retail Consortium that will be hopping to it, giving us some idea of how the UK High Street has been fairing of late.

Releasing its Retail Sales Monitor, the data will illustrate how store sales compared to the same time last year. The reading has come in above consensus expectations for the previous four months with many hoping that the trend can continue, especially during the grips of the cost-of-living crisis the UK finds itself in.

The middle of the week sees attention switch to the US, with the release of its inflation numbers. In what could be the first major data point after the easter break, both investors and the US Federal Reserve alike will be waiting in anticipation to see if the central bank’s aggressive rate rises are beginning to drag price rises down. The data will be accompanied later in the week by US retail sales figures. It will also be interesting to see how the recent collapse of US Silicon Valley Bank has affected consumer spending as the jolt to the financial system may have caused many to delay major purchases.

In what could potentially be an eggs-hausting week, we also have a speech from the Governor of the Bank of England (BoE), Andrew Bailey. Due to deliver a speech titled "The Shifting Risk Landscape" at the Institute of International Finance, in Washington DC, his words will be scrutinised by investors all over the world for any hints or clues as to future rate policy. With BoE chief economist Huw Pill having recently stated that the bank “must raise rates and see the job through” it will be interesting if his thoughts are echoed by Mr. Bailey and if the bank is indeed putting all its eggs in one basket in trying to stamp out inflation.

The information in this blog or any response to comments should not be regarded as financial advice. If you are unsure of any of the terminology used, you should seek financial advice. Remember that the value of investments can go down as well as up, and could be worth less than what was paid in. The information is based on our understanding as at 07 April 2023.