June 2023 Market Update

Overview

In a relatively light month of market moving news headlines, economic data releases took centre-stage. These showed global economic activity slowing somewhat, although still at levels indicating growth. Lower than expected inflation in the US and euro area gave these markets a boost and reinforced optimism that the end of the rate hiking cycle is near. Whilst this had little effect on government bond yields, riskier bond spreads narrowed and their prices rose.

The prospect of lower future interest rates also benefitted growth equities, particularly in the US.

The UK was an outlier, however, as inflation surprised to the upside again. This spurred the Bank of England into a larger than expected rate hike of 0.5%, adding further pain to anyone taking out a mortgage or re-mortgaging.

Full update below…