Despite trading consistently above 8,000 throughout last week, weaker outlook on the global macro environment has left the FTSE 100 at around 7,900 at the time of writing, down over 1% on the week.
Consumer confidence in the UK hit its highest level since April 2022, bouncing back from a near record low in January 2023. Surprisingly, this comes at a time when households are still worried about rising energy bills and the general cost of living.
The Dow and S&P 500 were down about 1.25% on the week at the time of writing with the NASDAQ 100 almost flat at 12,100. US futures have further weakened as the US Consumer Price Index data, a broad measure of inflation, reported a higher figure than expected.
Market participants continue to anticipate further interest rate rises. Minutes from the Federal reserves policy committee meeting earlier this month indicated an almost unanimous decision to raise them by 25 basis points, even though ‘a few’ would have preferred a higher 50 basis points.
Russian President Vladimir Putin used his state of the nation address to blame the west for his invasion of Ukraine and made clear his intentions to suspend the new START treaty, the last major pillar of post Cold-War nuclear arms control between Moscow and Washington. Later in the day, US President, Joe Biden gave a speech during his visit to Poland, ahead of the one-year anniversary of the invasion of the Ukraine. His speech was focussed primarily on continuing to support Ukraine despite the rising pressure from Russia to back down.
Brent traded to its lowest point in two weeks on Wednesday to $80.25, however it traded higher in the later half of the week. Gold has continued its downward trend and is revisiting levels not seen since the end of December around the $1,820 mark.
The current geo-political landscape is still the key driver of volatility in the commodity markets and looks likely to continue for some time.
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