Weekly round up
UK markets are set for their seventh weekly gain, with the FTSE 100 Index rising by 0.7% to trade at 7,624 points at the time of writing.
UK firms raised wages at the fastest rate in 25 years, as worsening staff shortages has handed employees bargaining power. The latest report on jobs from KPMG and REC showed the average salary awarded to new permanent joiners climbed more in March than at any time since records began in October 1997.
The hunt for defensive cash earners, such as those in the pharmaceutical and utilities sectors, has fed into the UK’s main index leaving the FTSE 100 up 3.5% year to date. Meanwhile, the UK slapped tougher sanctions on Moscow freezing assets of Russia’s largest lender Sberbank, among others, as well as shunning off commodity imports by the end of 2022, including oil and coal.
UK house prices have increased by more than £43,000 since the pandemic started, reaching a record high in March, as a lack of supply and strong demand boosted prices ahead of an expected slowdown linked to rising living costs. House prices were up 1.4% last month compared with February, the fastest pace in six months, with the average price of a property rising to a record high of £282,753.
In the commodity markets, Brent crude futures traded around $101 per barrel on Friday and were headed for their second straight weekly decline amid plans for a massive reserve release, demand concerns from top importer China, and a firm hawkish stance from the Federal Reserve. The UK oil benchmark is down approximately 3.5% this week, losing the bulk of the gains seen since Russia’s invasion of Ukraine started in late February.
International Energy Agency member states agreed this week to tap 60 million barrels of oil from strategic reserves, on top of a 180 million barrel release announced by the US last week, aimed at cooling energy prices. Crude prices were also hurt recently as China ordered city-wide lockdowns to quell a coronavirus outbreak.
Gold traded around $1,930 an ounce on Friday and was set to end the week with little changed, as the Federal Reserve’s aggressive tightening plans countered inflation concerns intensified by the Ukraine war and mounting sanctions on Russia.
US equity futures rose on Friday after the major averages ended Thursday’s regular session in positive territory, as investors continued to contemplate the Federal Reserve’s next policy moves. The Dow Jones Industrial Average, The S&P 500 and the Nasdaq turned positive during late Thursday trading after two straight days of losses.
The rebound came as investors took advantage of lower valuations, priced in a more hawkish Federal Reserve stance, and shrugged off fresh sanctions on Russia. Healthcare and consumer defensive stocks led the advance as investors continued to bet on companies with stable earnings and dividends. Energy firms also gained as geopolitical uncertainties buoyed prices. The US 10-year Treasury yield surged above 2.68%, its highest level since March 2019, with investors anticipating an aggressive looming policy tightening cycle as major banks sought to tame inflation.
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