Market Round-up: 7-11 September

Thomas Watts


This week

October 15 is a date that we will be hearing a lot more of over the coming month. Arguably the tone for markets this week was set as early as Sunday with Prime Minister Boris Johnson declaring the deadline for a post-Brexit trade agreement with the European Union. With talks ongoing throughout the week between the UK’s chief negotiator, Lord Frost, and his EU counterpart, Frenchman Michel Barnier, it is clear Boris Johnson is quite the historian, choosing a date that saw both Marie Antionette condemned to death and Napoleon exiled to Saint Helena.

Monday saw the FTSE 100 soar as high as the Montgolfier Brothers’ maiden hot air balloon ascent, also recorded on the 15 October. The main index rose 2.4%, after a three-week losing streak, buoyed by pharmaceutical giant AstraZeneca’s news that they have signed a contract to administer a COVID-19 vaccine to Australia. Housebuilders also joined the party as data showed the cost of a home in the UK reaching record levels.

Although markets across the pond were closed during the beginning of the week in observance of Labor Day, the tech rout which had started at the end of the previous week maintained its velocity, pushing the tech-heavy NASDAQ into correction territory as investors continued to reassess the sector. By the middle of the week, Wall Street traders had shrugged the fall off as “healthy” according to Bloomberg, seeing it as a bout of turbulence rather than the start of a long-term decline. The NASDAQ then posted its best day since April on the back of positive buy notes from both Goldman Sachs and Invesco, soothing investor worries.

Of course, it was on the 15 October that the Rentenmark was introduced in 1920s Germany to counter hyperinflation in the Weimar republic, so it should be fitting that the end of the week saw German final inflation numbers released by Destatis, the German statistics bureau. With the Eurozone having been plagued by anemic inflation for so long, the numbers did not make for pleasant reading, showing a retraction of -0.5% from the sharp rebound in prices during August. Being the largest economy in the Eurozone, Germany’s economic data often acts as a bellwether for the rest of the bloc, giving the numbers added importance.

Next week

The coming week brings us two addresses from central banks that demand investors pay attention, both domestically and in the US, and could have a profound impact on the upcoming geopolitical events of Brexit and the Presidential election scheduled for the Autumn.

However, it will be pay itself that will grab the headlines during the beginning of the week as the Office for National Statistics releases Average Earning data, a useful gauge for judging future inflation and consumer spending. The data represents the three-month moving average compared to the same period a year earlier and should take on added importance due to the government’s furlough scheme ending next month.

As the global economy starts to emerge from the COVID-19 induced recession of the earlier part of this year, Wednesday will see the US central bank, the Federal Reserve, give its views on the world’s largest economy, publishing minutes from their most recent meeting as well as holding a press conference open to questions from the media, which should cause amplified volatility, especially in currency markets.

This coming Thursday is no ordinary Thursday as the Bank of England (BoE) ushers in “Super Thursday”, an attempt to release a month’s worth of economic data in just one afternoon. Releasing their thoughts on the domestic economy and the issues facing it, investors will be keen to listen in over any potential hard Brexit qualms. With sterling having rallied hard against the USD and then sunk back down over Brexit worries, it will be interesting to hear what the bank makes of it all.


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 in September 2020.