Weekly Round Up
After initially falling earlier in the week, UK markets regained most of their ground with the FTSE 100 Index broadly flat at 7,050 points at the time of writing.
Investors’ focus will shift to a Bank of England meeting next week at which policymakers could provide a sign as to when the central bank will tighten its policy.
Economic data this week showed UK inflation jumped more than expected to a nine year high of 3.2% in August, while retail sales volumes unexpectedly fell for the fourth consecutive month. This is now the longest period of declines in at least 25 years amid a resurgence of coronavirus cases and supply disruptions. Data also suggested that the further easing of hospitality restrictions during August had an impact on sales at food and non-food stores as people shifted spending to services such as eating and drinking at restaurants and bars.
The Shanghai Composite Index rose 0.19% to finish at 3,614 on Friday, reversing from a slight fall in the early session after reports that the People’s Bank of China injected a total of CNY 100 billion of reverse repos to maintain liquidity in the banking system. Foreign direct investment into China was also reported to have soared 22.3% year-on-year in the first eight months of the year. For the week, however, the index sank 2.4%, dragged down by Beijing’s regulatory crackdown after a series of overhauls on industries and sporadic Covid-19 cases in China.
US stock futures were little changed on Friday as the Dow Jones Industrial Average and the S&P 500 both continued to fall this week. Investors remained concerned about uncertainty over the pace of the economic recovery and what the Federal Reserve’s next steps will be. Economic data showed retail sales unexpectedly rebounded in August, while initial jobless claims increased slightly more than anticipated. Meanwhile, US Treasury Secretary said on Thursday that it had disbursed about $700 billion in the Covid-19 relief programme in the first six months since the American Rescue Program was signed into law on March 11th 2021.
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