This week

The London Marathon, the Great North Run, all illustrious feats of endurance in their own right, but perhaps one of the most overlooked races on domestic shores is found in the small town of Olney in Buckinghamshire.

According to folklore, in 1445 a woman of Olney heard the shriving bell, a call to confess before Lent, whilst she was making pancakes, a staple food at the time. Running a full 415 yards to the local church in her apron, still clutching her frying pan, the unnamed housewife inadvertently started a tradition that would last centuries. The Olney pancake race is now world famous, having even taken place during the troublesome times of the Wars of the Roses and the First World War, with all competitors still having to be local housewives, required to wear both an apron and a hat or scarf to compete.

Of course, it goes without saying that you must bring your own pancake when taking part on Tuesday, with even the Office for National Statistics (ONS) seemingly joining in the tradition, releasing Purchasing Manager Index (PMI) data that was nearly as flat as the aforementioned food being raced with. With a reading above 50 indicating sector expansion and below, contraction, the monthly Manufacturing component of the UK economy came in at 49.2, almost plateauing. On the flip side, the much larger Services sector reading did show expansion, with a reading of 53.3, coming in way ahead of estimates of 49.2.

Not getting whisked away with the unexpectedly strong data, the more domestically orientated FTSE 250 fell 1.2% on the day, led lower by housebuilders, as investors fretted that the Bank of England will have to raise borrowing costs further to cool the economy.

Talk of rising interest rates have also been battering equities on the continent recently, forcing central banker, François Villeroy, to admit that investors have “overreacted” to hawkish rhetoric from the European Central Bank (ECB). Villeroy commented that peak interest rates could be reached by the end of the summer, but the ECB was under no obligation to raise rates at any of its meetings until September.

With investors betting that that the ECB will look to raise rates by at least another 1-1.5% this year, bond yields continued their way higher throughout the week. There are of course a lot of inflation data points that the ECB will have to take account of before the Autumn, but it is perhaps with some irony that Villeroy is also a Banque de France Governor. September is just over 6 months away now and we know how these dates can crepe up on us…

The week was wrapped up with US Personal Consumption Data, showing U.S. consumer spending increased by the most in nearly two years in January amid a surge in wage gains. When adjusted for inflation, consumer spending increased 1.1%, also the biggest gain since March 2021. With such strong numbers, it seems that any talk of inflation beginning to abate just yet, may be pure waffle.

Next week

With February transitioning into March during the coming week, any astrologer worth their salt will tell you that we are in the 12th and final age of the of the zodiac, Pisces. Latin for fish, interestingly the link between the star sign and the aquatic world can be traced all the way back to c.2300, with archaeologists noting its appearance of two fish on an Egyptian coffin lid from the time.

From astrologers and archaeologists to economists, the coming week should fascinate all such scholarly pursuits. With some astrologers arguing we are indeed in the age of Pisces, not Aquarius, the coming week should provide plenty to tackle, with a stream of US data getting many of us hooked come Monday.

US Durable Goods Orders and Pending Home Sales will help to give us a more comprehensive view as to the strength of the US economy, measuring just how much of an impact the US Federal Reserve’s recent rate hikes have had on corporate and consumer spending. Pending Home Sales data is particularly interesting as it acts as a leading indicator of economic health. The sale of a home can trigger a wide-reaching ripple effect across the economy, for example, renovations and new furniture are often purchased by the new owners, a mortgage is sold by the bank and estate agents and solicitors are paid to execute the transaction.

Staying in the US, Wednesday will present us with the US Conference Board’s o-fish-al Consumer Confidence numbers. A nation’s economy starts and ends with the person on the street and so how confident that consumer feels is of great importance and is often an indicator of upcoming economic activity. The data itself derives from a survey of about 3,000 US households which asks respondents to rate their relative level of current and future economic conditions including job availability, business conditions, and their overall economic situation.

The week will be rounded off by Eurozone unemployment figures, detailing the amount of those on the continent who are unemployed and have been looking actively looking for work during the last month. With the unemployment rate having ticked up by 0.1% last month, many job seekers will be hoping we don’t see that phenomenon doesn’t happen two times in a roe.

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 24 February 2023.