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Archinomics Weekly - Monday 15th November 2021

15 days ago

the
MARKETS

Equities

Global equities were relatively flat last week. US markets were slightly weaker after the high inflation reading, while in Europe the Euro Stoxx 50 index gained 0.2% and the FTSE 100 rose 0.6%. Emerging markets fared slightly better, with the MSCI Emerging Markets index gaining 1.7%, led higher by China and Brazil. 

Bonds

US Treasuries were weaker last week. The government bonds sold off as CPI inflation continued to rise rapidly in the US. In corporate bond markets, investment grade and high yield bonds were also weaker in both the US and Europe.

Currencies

The US dollar was the standout performer last week, as rising inflation fuelled expectations of tighter monetary policy – which is seen as positive for local currencies. The euro was weaker across the board, while sterling gained ground against the euro but fell versus the dollar and the Japanese yen.

Commodities

The oil price cooled off slightly, and Brent Crude fell 0.7% to finish the week at $82.20 per barrel. Gold was stronger, rising 2.6% to $1,864 per ounce, while copper also gained 2.5% over the week.

Responsible investing

The COP26 climate conference concluded last week, with negotiations continuing into the weekend before a final agreement was announced on Saturday evening. Concessions were made over the phasing out of coal at the last minute, but nonetheless the agreement is considered strong enough to ‘keep 1.5 degrees Celsius alive’.

MACROECONOMIC
UPDATE

US Consumer Prices Index (CPI) inflation rose at its fastest pace since 1990, coming in at 6.2% year-on-year.


Inflation data in Asia also showed a continued increase in prices. Japanese producer price inflation rose at its fastest rate in 40 years, mainly due to surges in energy and commodity prices. And in China, factory gate prices were at their highest in 26 years.


China’s President Xi Jinping was honoured with an ‘historical resolution’, placing him on equal footing with ex-leaders Mao Zedong and Deng Xiaoping.

on the
RADAR

President Xi Jinping of China will hold virtual talks with US President Joe Biden later today, to discuss the future relationship between the two economic superpowers. 


CPI data for the UK, Europe and Canada will give new insights into how the inflation story is progressing in these regions.

Listen to our weekly podcast for more information and our experts’ insights.

Architas

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