This week

With lockdown restrictions all but gone and demand for labour increasing at a rapid rate, one industry it was revealed this week has been proving to be most popular.

It seems that dogs are for life, not just the pandemic, as the 3.5 million brits who bought a dog during lockdown return to their place of work, are struggling with the demands of looking after their new 4-legged friends. As an anecdotal example of domestic inflation, dog walker prices have increased nearly 10% since the pandemic with some prices in London topping £25 per walk.

However, on currency markets this week, it was not the pound that was in demand but the Euro, surging to weekly highs against a basket of developed currencies.

It was a beleaguered Euro that received a new leash of life this week after a heated TV debate saw French President Emmanuel Macron bolster his re-election hopes. Although the opposition leader, Marine Le Pen, avoided the pitfalls of a previous encounter in 2017, when her presidential bid unravelled as she mixed up her notes, it did not seem enough as she was constantly accused of ties with Russia President, Vladimir Putin. A snap poll conducted for the French BFM TV channel afterwards showed that 59% of respondents found Macron the more convincing of the two.

A series of hawkish comments amplified bets that the European Central Bank would soon hike interest rates also pushed the common currency higher. Investors who had eased rate hike predictions following last Thursday's ECB meeting, were now pricing in a 0.2% rise by July and over 0.7% of hikes by the end of the year.

Whilst dog lovers may be willing to pay the extra cash for their pets, it seems that the consumer is certainly tightening their belt in other areas. In the doghouse this week was streaming service Netflix, another purchase that enjoyed a boom during lockdown but is seeing interest wane now the world has opened up. A total of 1.51 million services were cancelled in the UK alone during the first three months of 2022. According to a survey more than half a million of these cancellations were attributed to "money saving", with households budgeting for higher prices and energy bills instead. Interestingly, about 58% of Britain's homes now have at least one paid streaming service.

Reporting its first drop in subscribers globally in a decade, investors paused for thought when evaluating a growth company that doesn’t seem to be growing any more. The streaming pioneer's shares fell 37%, its worst day in nearly 18 years, seeing the stock lose 4 years’ worth of gains in less than 4 months.

Next week

With Spring in the air and the weather getting warmer, many will be starting to book their summer getaways to sunny Europe. However, its Europe’s economic climate investors will be interested in on Monday, as the bloc’s largest constituent, Germany, releases its business conditions survey data.

The survey is highly respected due to its large sample size and historic correlation with German and wider Eurozone economic conditions, tending to create a hefty market impact when released. The data is useful in that it acts as a leading indicator of economic health with businesses reacting quickly to market conditions, with changes in their sentiment acting as an early signal of future economic activity such as spending, hiring and investment.

The data will come hot on the heels of yet more news from the continent, after the French electorate heads to the polls over the weekend in the nation’s presidential elections. With incumbent President, Emmanuel Macron, seemingly stretching his lead over challenger, Marine Le Pen, over the past week, the world will be watching as a centrist and social liberal takes on a far right, euro-sceptic.

Towards the end of the week, investor focus will switch to Japan as its central bank gives its outlook for the world’s 3rd largest economy. The report will provide a valuable insight into the bank's view of economic conditions, inflation and the key factors that will shape the future of monetary policy. The data should be made all the more interesting as the yen walks a tightrope between damaging or enhancing an economy that relies on a weak currency to sell its goods. However, with the yen recently hitting a 20 year low against the USD, Japan’s finance minister has warned that the cost of importing raw materials is hurting businesses and the consumer.

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 22 April 2022.