The noise
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The S&P Global/CIPS Services Purchasing Managers’ Index (PMI) for Britain’s services sector saw its sharpest decline in 2023 as it fell to a seven-month low in August. Higher interest rates reduced consumer and corporate demand, although its impact was smaller than originally estimated. Additionally, the Manufacturing PMI suffered its weakest month since early in the Covid pandemic as orders for factories shrank due to the rise in interest rates at home and abroad.
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China is considering to expand a ban on the use of iPhones in sensitive departments, government-backed agencies and state companies. They are looking to extend the restriction far more broadly to state-owned enterprises and other government-controlled organisations. The curbs show that even a company with good relations with the Chinese government and a large presence in the world’s second-biggest economy was not immune to rising tensions between China and the US.
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No energy companies have submitted bids in the UK government’s offshore wind auction that would have provided financial support contracts. This comes following ignored warnings that the subsidy offered was too low to reflect soaring costs. Despite this, the UK government reported a record number of renewables projects had been awarded funding. These projects across onshore wind, solar, and tidal are expected to provide 3.7GW of clean energy, enough to power two million homes.
The numbers
GBP Performance to 07/09/2023
|
Equity GBP Total Return
|
1 Week
|
YTD
|
|
MSCI ACWI
|
0.3%
|
10.4%
|
|
MSCI USA
|
0.3%
|
13.8%
|
|
MSCI Europe
|
-0.8%
|
6.6%
|
|
MSCI UK
|
0.2%
|
3.1%
|
|
MSCI Japan
|
2.7%
|
11.4%
|
|
MSCI Asia Pacific ex Japan
|
0.8%
|
-1.5%
|
|
MSCI Emerging Markets
|
0.8%
|
0.7%
|
|
MSCI EAFE
|
0.0%
|
6.3%
|
|
Fixed income GBP Total Return
|
|
|
UK Gilts
|
-1.0%
|
-4.6%
|
|
Global Aggregate
|
-0.7%
|
1.6%
|
|
Global Treasury
|
-0.6%
|
1.6%
|
|
Global Investment Grade Hedged
|
-0.8%
|
1.9%
|
|
Global High Yield hedged
|
-0.2%
|
5.7%
|
|
Currency moves
|
|
|
|
GBP vs USD
|
-1.6%
|
3.2%
|
|
GBP vs EUR
|
-0.2%
|
3.2%
|
|
GBP vs JPY
|
-0.4%
|
15.9%
|
|
Commodities GBP return
|
|
|
Gold
|
0.5%
|
2.1%
|
|
Oil
|
5.4%
|
7.6%
|
Source: Bloomberg, data as at 07/09/2023
The nuance
Oil has rallied the past two weeks, as Saudi Arabia and Russia extend their voluntary oil cuts to the end of the year. This comes despite expectations that supply will remain tight through the fourth quarter, which could see oil prices rise even further. The US, who argue that the world needs lower energy prices to support economic growth have seen domestic shale output drop in recent months. This will make it more difficult for them to counteract these extended production cuts by Saudi Arabia and Russia.
Elsewhere in the energy space, workers at Chevron’s liquefied natural gas (LNG) projects in Australia have gone on strike. These strikes could potentially disrupt output from facilities that account for over 5% of global supply and has resulted in European gas prices jumping as much as 12% Friday morning.
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