Stay up to date with the latest market trends, economic shifts and key financial developments across the UK, US and Asia.
Key market events
🏦 Interest rates stay put
- The US Federal Reserve (Fed) and the Bank of England (BoE) both kept rates on hold at 4.25% - 4.50% and 4.5% respectively as uncertainty around the economic outlook lingers.
💼 Unemployment unchanged
- The UK’s unemployment rate remained unchanged at 4.4% in January versus the month prior, as the rate of short-term job seekers rose while long-term unemployment fell.
📈 Wage growth remains high
- Average UK wages (excluding bonuses) rose by 5.9% in the three months to January, led by the public sector.
🛍️ Chinese retail sales jump
- Sales came in hotter than expected, 4% year-on-year, led by strong demand for food, oil and alcohol.
💻 Google’s big move
- Google’s parent company, Alphabet agreed to purchase the fast-growing cyber security company Wiz for $32bn, which will be folded into Google’s Cloud arm.
What this means for financial advisers and clients
With broad economic uncertainty high in the US – trade tariffs, immigration policies and tax debates are all adding to the economic fog. With inflation proving stickier than hoped, the Fed opted to hold rates in place, as expected. However, comments by Fed Chair Jerome Powell helped reassure markets that these uncertainties are temporary and that the rate cutting cycle is continuing as planned later in the year, lifting the S&P500, NASDAQ and bonds.
In the UK, unemployment and wage growth data defied bleaker expectations following the government’s National Insurance hike for employers. Both elements likely contributed to the BoE’s decision to stay put, with continued high wage growth also fuelling concerns of inflation making a comeback.
Chart of the week - poor predictors
This chart shows the gap between Fed interest rates and what was predicted by futures markets.
Source: Bloomberg, Man Group, as at 1st December 2024.
Why this matters
Long-term rate predictions rarely hit the mark, and while several cuts are still being predicted for the US and UK in 2025, much uncertainty surrounds the path of inflation, growth and any associated policy responses. So, investors should be wary to take predictions with a pinch of salt.
Market recap
US markets edge down
- Gains in energy, utilities and defence - from rising crude prices and a heightened focus on conflict - struggled against areas like consumer discretionary and communication sectors. Weak investor sentiment weighed down, while semiconductor supply chain issues hit companies within the tech sector.
UK hanging-on
- Markets stayed above water thanks to strong banking stocks and higher oil prices, despite concerns over the global growth outlook, and some profit taking across defence and banks.
Modest growth in Asia
- Japan’s Nikkei 225 saw a small gain, helped by a depreciating Yen (making exports more competitive) and increased market sentiment on muted inflation data. After a very strong start to the year, the Hang Seng flattened on profit taking across the tech industry and fresh worries over US tariffs.
Commodity gains
- Oil rose as Middle East tensions threatened supply and OPEC+ agreed production cuts. While gold kept rising as investors sought safety amid global inflation and growth concerns.
| | Weekly Change | YtD Change |
|---|---|---|
| FTSE 100 | 0.82% | 7.43% |
| FTSE 250 | 0.54% | -2.09% |
| S&P 500 | 0.00% | -6.85% |
| NASDAQ | -0.56% | -9.42% |
| MSCI Europe ex UK | 0.41% | 11.57% |
| Hang Seng | 0.63% | 17.35% |
| Nikkei 225 | 0.45% | -4.34% |
| Brent Crude | 2.42% | -3.09% |
| Gold Spot | 1.71% | 15.49% |
| UK 10yr Gilt yield | -4bps | +5bps |
| US 10yr Treasury yield | -3bps | -33bps |
Source: FE FundInfo, goldprice.org, exchangerates.org.uk, investing.com and finance.yahoo.com. GBP returns as at close of business on Thursday 20th March 2025.
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