Since our last overview, we’ve been indulged with healthy servings of US jobs data, UK GDP figures and mortgage approval statistics, so be warned – we return with an overview that is data heavy!

Welcome to our Astute Market Overview of the last couple of weeks.

Anecdotally, we’ve seen both the flu and coronavirus “do the rounds” this Christmas, so we hope that this overview finds you safe and well, and settled into 2023.

Over the period, following the easing of China’s zero-Covid policy, England and the US (amongst others) announced they will take covid testing precautions when it comes to those travelling from China. The Chinese government has been criticised for, and accused of, not sharing accurate information on the level of covid deaths.

In the UK, data from the ONS showed that UK GDP for the third quarter of the year was revised downwards to -0.3% between July and September 2022, more of a fall than the initially expected -0.2%. The ONS themselves provide a nota bene alongside this release: September saw a bank holiday for the funeral of her majesty Queen Elizabeth II. It was a unique bank holiday, where many businesses (even those usually open on a bank holiday) either closed all together, or changed their operating hours, which will have distorted the headline figure.

In other UK news, data released by the Bank of England showed that mortgage approvals in the UK were down. Mortgage approvals for November 2022 came in at 46,100, from 57,900 in October. This backward looking data shines a light on the impact of soaring mortgage rates (which we touched on in our last Astute Market Overview), when high inflation and energy bills are already squeezing the pockets of UK consumers.

And finally, to the US. We had mixed messages from US labour market data released on Friday.

On one hand, US non-farm payrolls – a key piece of data that helps to illustrate the US jobs markets – showed that jobs increased by 223,000 in December, and the unemployment rate dipped from 3.6% to 3.5%. This strong US labour market data shows that interest rate increases in the region haven’t caused an increase in unemployment (which would likely help to cool inflation).

On the other hand, wage growth came in below broad economist forecasts, which is likely to ease some of the pressure behind inflation. After an initial mixed reaction from US markets on Friday, they ended the week higher. The Federal Reserve in the US still have a way to go before inflation comes back down towards 2% targets.

Over the next couple of weeks, some of the things we’ll be watching out for include:

• Inflation data from the UK, Eurozone and China – whilst we expect to see readings in the UK and Eurozone that will show inflation has peaked, China haven’t suffered the same high levels inflation
• Chinese Q4 GDP, and
• UK unemployment data and UK retail sales

See you then.