Markets wait for the next interest rate decisions

This week we saw more of the bad news is good news effect. US equity markets have been part of the general rise in risk assets in recent weeks and the publication of economic data that was worse than expected on Monday gave US equities a leg higher as this seemed to reinforce the view that the US Fed will soon slow its rate hikes. However, markets seem to be looking for the positive as better-than-expected GDP numbers from the US were also welcomed as good news while slightly disappointing earnings updates from Intel and Microsoft failed to dampen the mood.

In the UK the picture is slightly reversed. Economic data shows the UK continuing to slow faster than other developed nations while many of the corporate updates – which this week included struggling industries such as pubs and airlines – were surprisingly upbeat. Although the news was in line with or exceeded expectations, UK equities lagged slightly. Government bonds were a bit weaker but fixed income markets have been relatively calm as investors await next week’s interest rate decisions from the Bank of England, Federal Reserve and European Central Bank.

For the following stories, please click on this link*

• Global – Equities rise as investors wait for rate decisions
• UK – Producer prices slowing as output falls
• Equities – Out of favour sectors have led the recent rally

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