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Weekly Notes

The Week In Markets – 8th August – 14th August 2026

Investor attention was firmly focused on the US inflation data released midweek. With last Friday’s weak labour market report pointing to a slowdown in economic activity, a softer inflation reading would provide further justification for policymakers to keep rates on hold.

Headline inflation for July fell in line with market expectations to 3.4%, while core inflation, which excludes food and energy prices, declined to 2.5%. Most notably, gasoline prices fell by 2.9% for a second consecutive month, suggesting a limited pass-through effect from the renewed conflict in the Middle East during July. Hotel and motel prices also declined, reflecting a continued unwinding of the boost associated with the World Cup.

While the data points to easing price pressures, it does not necessarily mean the US economy is out of the woods. More hawkish members of the Federal Reserve are likely to seek further evidence that inflation is on a sustained path back towards target before adjusting their stance on future interest rate increases.

The “yentervention”, referring to the coordinated action by the US and Japan to halt the yen’s decline, appears to have had only a temporary impact. The yen has weakened back to around ¥159 against the US dollar, giving up almost half of its post-intervention gains and moving ever closer to the psychologically important ¥160 level, where markets have historically expected policymakers to step in.

Japan’s Producer Price Index (PPI) rose by 7.2% in July. While this was slightly below market expectations of 7.4%, it remains elevated by historical standards. Producer costs have remained under pressure as renewed tensions in the Middle East have not only pushed up oil prices but also increased the cost of precious metals and other raw materials. Investors are concerned that higher wholesale prices could eventually feed through into broader inflation, reinforcing expectations that the Bank of Japan may raise interest rates at its September meeting. Markets will have several opportunities to assess the policy outlook before then, with three speaking engagements scheduled from Bank of Japan policymakers ahead of the decision.

The positive run of economic news for Prime Minister Andy Burnham continued this week with the release of UK second-quarter GDP data. The economy expanded by 0.4% over Q2, while growth in June came in at 0.3% month-on-month. Warm weather and the start of the FIFA World Cup provided a boost to consumer spending, benefiting a range of sectors including alcohol manufacturers, restaurants, television retailers and advertising firms. Newly appointed Chancellor John Healey welcomed the figures and maintained that the government’s priority remains tackling the elevated cost of living and providing greater financial breathing space for households continuing to feel the strain.

There will be several questions facing Chancellor Healey ahead of the October Budget. Experience under former Chancellor Reeves demonstrated how expectations of a tough fiscal package can quickly dampen economic momentum and weigh on business and consumer confidence. Markets are increasingly concerned that the Burnham administration may look to raise additional revenue through higher taxes on wealth and businesses. These concerns have been reinforced by policy signals pointing towards greater investment in council housing, increased defence spending and to address the challenges facing the social care sector, all of which will require significant funding.

Overall, it was a calmer week in markets. Equities nudged higher, with the US market making fresh all time highs, while gold and silver continued their mini recovery over the first part of the week. Inflation data supported fixed income assets after a tricky few weeks following the re-escalation in the Middle East.

Nathan Amaning, Investment Analyst

Risk warning: With investing, your capital is at risk. The value of investments and the income from them can go down as well as up and you may not recover the amount of your initial investment. Certain investments carry a higher degree of risk than others and are, therefore, unsuitable for some investors.

The Week In Markets – 1st August – 7th August 2026

As we enter August and the final third of the year, the month has already begun with a notable market event. Japan’s Ministry of Finance and the US Treasury undertook a rare joint intervention to combat the yen’s sell-off after it fell to a 40-year low of 164 against the US dollar. Following the intervention, the currency recovered to 155.2.

The intervention helped stabilise markets by signalling the US’s willingness to prevent a further sharp depreciation of the yen. However, it is unlikely to provide a long-term solution. Japan’s Prime Minister, Sanae Takaichi, is expected to pursue expansionary fiscal policies and may seek to influence monetary policy, developments that could put upward pressure on Japanese Government Bond (JGB) yields. With JGB yields already at 30-year highs, any further increase could renew downward pressure on the yen and trigger another round of selling. Reflecting these broader concerns, US Treasury Secretary Scott Bessent emphasised that the US would be closely monitoring any potential spillover effects on global bond markets.

Scott Bessent also had a busy week on the geopolitical front. On Tuesday, he told markets that Washington and Tehran could reach an agreement on reopening the Strait of Hormuz as early as Wednesday. President Trump had suggested several times in recent weeks that a deal was close, but markets appeared to place greater weight on Bessent’s comments. US equities rallied in response, while oil prices moved lower.

However, the anticipated breakthrough has yet to materialise. Shipping traffic through the Strait remains limited, and oil prices have subsequently edged back above $80 per barrel. Reports have also emerged suggesting that the US has drawn heavily on its stockpile of long-range precision missiles, raising concerns over inventory levels. Nonetheless, President Trump remains under pressure to secure an agreement with Iran ahead of the November midterm elections.

The first Friday of the month brought the closely watched US non-farm payrolls report, with investors eager to assess the strength of the labour market during July. In a significant surprise, the economy shed 23,000 jobs over the month, sharply undershooting market expectations for the creation of 80,000 jobs. The picture was further weakened by revisions to previous releases, with May and June payroll growth revised down to 63,000 and 20,000 respectively which suggests the weakness became a trend towards the end of the second quarter. The data release has intensified focus on the upcoming Jackson Hole Symposium and how Fed Chair Kevin Warsh may respond given the Federal Reserve’s dual mandate for maximum employment and price stability around the 2% inflation target.

Investors received SpaceX’s earnings report for the first time since the company went public. Elon Musk’s spaceflight, telecommunications and AI company exceeded analysts’ expectations, reporting second-quarter revenue of $7.8bn and a net loss of $540mn, significantly better than the $2.12bn loss forecast by the market. Despite the stronger-than-expected results, investors remained focused on the company’s ambitious expansion plans. A key concern is Musk’s intention to increase computing capacity from 2 gigawatts to almost 10 gigawatts by the end of 2027. Achieving this target would require substantial capital expenditure, with each gigawatt of computing capacity costing billions of dollars and relying heavily on semiconductor chips that remain in short supply. Such concerns have weighed on the share price since the listing, as the share is down almost -30%.

It was a quiet week in the UK in terms of economic data. However, there was yet another bid for a UK-listed company from US private equity. Bodycote announced on Wednesday that it had received separate approaches from CVC and Veritas. The shares rallied sharply on the news, helping to propel the FTSE 250 to fresh all-time highs.

Gold and silver staged a modest recovery during the week, with gold moving above $4,300/oz and silver climbing through $60/oz. The gains were driven by a combination of easing expectations for further Federal Reserve tightening, a weaker US dollar and continued hopes that tensions in the Middle East could moderate. Silver also benefited from improving investor sentiment towards industrial metals.

Despite what has often felt like a challenging year, characterised by a steady stream of negative headlines, portfolios have remained resilient and reached new highs this week. Equities have continued to do much of the heavy lifting, while fixed income markets have remained challenged by renewed inflation concerns.

Nathan Amaning, Investment Analyst

Risk warning: With investing, your capital is at risk. The value of investments and the income from them can go down as well as up and you may not recover the amount of your initial investment. Certain investments carry a higher degree of risk than others and are, therefore, unsuitable for some investors.

The Week In Markets – 25th July to 31st July 2026

We begin the weekly with the blockbuster IPO of Chinese semiconductor company ChangXin Memory Technologies (CXMT). Founded more than a decade ago, the firm specialises in the production of DRAM memory chips. On Monday, its shares made their debut on the Shanghai Stock Exchange, soaring an astonishing 466% on the first day of trading and valuing the company at approximately $488 billion, making it China’s most valuable company. The strength of the debut highlights the extraordinary enthusiasm surrounding memory manufacturers, as investors increasingly view them as critical beneficiaries of the accelerating global investment cycle in artificial intelligence and data centre infrastructure.

There was a brief pause in hostilities between the US and Iran over the weekend, with President Trump claiming that Iran had sought peace talks. The development eased concerns in energy markets, causing Brent crude prices to retreat from above $100 per barrel to around $86. The uncertainty from the ongoing conflict in the Middle East weighed on policymaker’s minds ahead of this week’s central bank meetings, as officials assessed whether geopolitical tensions could keep inflation elevated.

The respite proved short-lived, with the US subsequently reporting that it had launched significant retaliatory strikes following attempted attacks by Iran on American forces. The conflict has already imposed a substantial financial burden on the US, with costs estimated at around $37.5 billion to date with further funding requests totalling $67 billion submitted to the Pentagon.

The conflict quickly moved to the back of investors’ minds as global technology stocks sold off on Tuesday on renewed concerns over AI capex sustainability and China’s advances in memory chip supply. In South Korea, SK Hynix fell more than 10% and Samsung declined 5%, helping drag the KOSPI (South Korea) index lower for the week. At one stage the Korean index had advanced over 100% in 2026 alone, however, the index has fallen by over 30% since the mid-June highs. Huge retail participation, coupled with leverage, has made the market extremely volatile.  US semiconductor stocks also came under pressure on Tuesday, with SanDisk down 20%, Micron 12%, and AMD 11%. In contrast, the FTSE 100 reached a record high on Wednesday, benefiting from its lower exposure to technology stocks and greater weighting towards financials and energy.

Rolls-Royce was among the top performers this week after reporting stronger-than-expected first-half results, with operating profit rising 46%. Full year guidance was raised to the expectation of £4.7 billion to £4.9 billion in operating profits and £4.0 billion free cash flow. CEO Mr Erginbilgiç has overseen increased demand for civil and military engines in Airbus and Boeing Navy planes whilst also announcing Rolls Royce first ever share buyback programme. The shares are up 8% this week and more than 22% year to date.

The US Federal Reserve met on Wednesday and as widely expected, left interest rates unchanged at 3.75%. However, three of the twelve policymakers dissented, arguing that rates should be increased as rising fuel prices, driven by the conflict with Iran and disruption to oil flows through the Strait of Hormuz, risk reigniting inflationary pressures.

Fed Chair Kevin Warsh has continued to stamp his authority on the central bank, moving away from the forward guidance that previously provided investors with a clearer indication of the future path of interest rates. While Mr Warsh noted during his post-meeting press conference that the Fed “will not hesitate to act”, he stopped short of signalling any immediate policy change. Markets will now look ahead to the Jackson Hole Symposium next month, where investors will be keen to hear how the Fed’s thinking has evolved in what remains a rapidly changing environment.

There was a flurry of earnings reports from US technology giants this week. Meta shares continued to decline after the company warned that third-quarter revenue could come in below expectations, while AI-related spending is set to remain elevated, contributing to a 91% fall in free cash flow to $780 million. Apple, which will welcome a new CEO in September, reported strong second-quarter iPhone sales of $54.3 billion but cautioned that memory chip shortages could weigh on revenue growth in the coming quarter. Despite these concerns, the technology sector rallied strongly, helping the Nasdaq gain 3.4% on Thursday, one of its best days of the year. The positive news spilled into global markets overnight, with the KOSPI index rising a staggering 18% on Friday, as positivity once again returned to the semi-conductor companies.

The Bank of England (BoE) also met on Thursday and, as expected, left interest rates unchanged at 3.75%. Similar to the US Federal Reserve, three policymakers, Greene, Mann and Pill, dissented in favour of a 25bps rate hike. Governor Andrew Bailey acknowledged that the renewed conflict in the Middle East and declining European oil reserves ahead of winter present upside risks to inflation. The focus remains on whether these pressures feed through into broader inflation via second-round effects. Meanwhile, the dissenters argued that raising rates now would help get ahead of those risks and demonstrate the BoE’s commitment to maintaining price stability.

Nathan Amaning, Investment Analyst

Risk warning: With investing, your capital is at risk. The value of investments and the income from them can go down as well as up and you may not recover the amount of your initial investment. Certain investments carry a higher degree of risk than others and are, therefore, unsuitable for some investors.

The Week In Markets- 18th July – 24th July 2026

The doors of Number 10 Downing Street swung open bright and early this week as Andrew Burnham began his tenure as Prime Minister. The former Mayor of Greater Manchester is now the UK’s 59th Prime Minister and the seventh person to hold the office in the past decade.

Cabinet appointments were another key focus on Monday, with Burnham naming John Healey as Chancellor of the Exchequer. You may recall that we covered Healey’s resignation as Defence Secretary just a few weeks ago. The rest of the Cabinet soon took shape, with Ed Miliband appointed Foreign Secretary, Shabana Mahmood becoming Home Secretary, Angela Rayner taking on the role of Housing Secretary, and Wes Streeting succeeding Healey as Defence Secretary.

UK defence stocks certainly benefited from Mr Healey’s appointment as Chancellor, with shares such as Babcock and BAE Systems rising more than 12% and 9% respectively over the week. Investors appear encouraged by the prospect of Healey pushing defence spending towards the government’s 3% of GDP target by 2030.

However, increasing defence expenditure will be just one of several challenges facing the new Chancellor. Healey must also contend with wider spending pressures, potential tax rises, and the government’s ongoing efforts to reform welfare. Several measures have already been announced, including a reduction in taxes on electricity bills and a lower cap on bus fares.

As the saying goes, good things come in threes, and the positive news continued with the UK’s latest inflation data. Headline CPI fell from 2.8% to 2.6% year-on-year, while core inflation remained unchanged at 2.6%. The figures were also supported by softer services inflation and slowing wage growth.

While this marks an early win for Prime Minister Burnham and Chancellor Healey, the recent escalation in tensions across the Middle East has clouded the outlook. Inflation measures such as CPI are inherently backward-looking, and the picture ahead appears more uncertain. Despite growing forecasts that inflation could rise above 3% by year-end, markets still expect the Bank of England (BoE) to leave interest rates unchanged at its next meeting.

Oil prices rose above $99 per barrel for the first time since May after Houthi militants attacked two Saudi Arabian ships in the Red Sea, raising concerns over global supply disruptions. In response, US President Trump said he was considering a major attack on Iran, while the country also endured a 13th consecutive day of air strikes. The uncertainty weighed on markets, with the S&P 500 and Nasdaq falling 1.2% and 1.9% respectively on Thursday. Although a ceasefire was agreed last month, the prospect of a lasting peace deal appears increasingly distant as both sides continue to escalate the conflict.

Alphabet (Google) made headlines this week after reporting negative free cash flow of $5.9bn, the first time since its 2004 public listing. The decline reflects a significant increase in capital expenditure, with investment expected to reach $205bn in 2026 as Google continues to compete aggressively in the AI race. Speaking on Thursday, CFO Ashkenazi remained confident that these investments in technical infrastructure would allow the company to capitalise on the AI opportunity and generate attractive long-term returns. A key focus remains the development and training of Gemini, Google’s large language model (LLM), as it seeks to strengthen its position against rivals including Anthropic and OpenAI. However, the scale of Google’s AI spending continues to raise questions among investors. Concerns over when these investments will translate into meaningful returns weighed on sentiment, with Alphabet shares falling nearly 8% over the week.

The European Central Bank (ECB) met this week and, in line with market expectations, left interest rates unchanged at 2.4%. Policymakers remain focused on monitoring the impact of rising energy prices and potential supply disruptions stemming from tensions in the Red Sea.

Attention now turns to next week’s meetings of the US Federal Reserve and the Bank of England, where investors will be looking for signs of how policymakers are assessing the evolving inflation and growth outlook amid heightened geopolitical uncertainty.

Nathan Amaning, Investment Analyst

Risk warning: With investing, your capital is at risk. The value of investments and the income from them can go down as well as up and you may not recover the amount of your initial investment. Certain investments carry a higher degree of risk than others and are, therefore, unsuitable for some investors.

The Week in Markets: 11th July to 17th July 2026

This week provided a reminder that financial markets are constantly looking forward, whilst economic data tends to describe a world that has already passed. Tuesday’s US inflation figures showed a sharp decline in price pressures during June and offered fresh evidence that inflationary pressures may be beginning to ease. Yet by the time investors received those numbers, oil prices had already moved higher following renewed tensions around the Strait of Hormuz. The data was correct, but markets had already begun focusing on what comes next.

Beginning with inflation, the US Consumer Price Index fell 0.4% in June, the largest monthly decline since April 2020, taking the annual rate to 3.5% from 4.2% in May. A sharp decline in energy prices accounted for much of the headline improvement. Beneath the surface there was also encouraging news. Core inflation, which strips out food and energy costs, was unchanged on the month and slowed to 2.6% year-on-year, suggesting that underlying price pressures may be beginning to moderate after several months of acceleration.

Markets were quick to look beyond the report. By the time the data was published, oil prices had already moved higher following renewed tensions around the Strait of Hormuz. Brent crude rose more than 4% at the start of the week, leaving investors to judge whether the improvement seen in the inflation data can persist as energy prices once again move in the opposite direction.

That tension was evident in comments from Federal Reserve Chair Kevin Warsh during his first semi-annual testimony before Congress. While acknowledging the improvement in inflation, he rejected any suggestion that the Federal Reserve’s job was complete and reiterated that policymakers have “no tolerance for persistently elevated inflation”. The Fed has now held rates at 3.5%-3.75% for four consecutive meetings and will next convene at the end of July. Warsh was notably more enthusiastic about business investment, highlighting strong growth in equipment spending and suggesting that what is currently labelled as “AI investment” may soon simply be called investment.

The UK also received fresh growth data this week. GDP grew by 0.1% in May, reversing part of April’s 0.1% decline. Looking at the broader trend, the economy was 0.7% larger over the three months to May than in the previous three-month period. Growth was driven by the services sector, while production and construction both contracted during the month. While growth remains modest, the figures suggest the economy continues to expand despite a challenging backdrop.

The data does little to simplify the task facing the Bank of England. Ten-year gilt yields have been trading close to 5%, near two-month highs, as investors reassess the likely path of interest rates. The Bank held the Bank Rate at 3.75% in June by a vote of seven to two, with two policymakers favouring a further increase to 4%. Markets now await the next inflation release later this month for further clues on whether policymakers feel able to hold rates steady, or whether further tightening may be required.

Political developments have added a further layer of uncertainty. With attention turning to the composition of the incoming government, investors are likely to focus on the broader fiscal strategy. At a time when ten-year gilt yields are trading close to 5%, markets will be paying close attention to any signals on spending, taxation and borrowing.

This week also brought results from two of the most important companies in the global semiconductor industry. ASML, the Dutch manufacturer whose lithography machines are used to produce advanced chips, reported strong demand from customers continuing to expand capacity. Meanwhile, Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, delivered another solid set of results and maintained optimistic growth expectations for the year ahead. The results provide further evidence that demand for the infrastructure underpinning artificial intelligence remains strong. Yet the weakness in semiconductor shares at the end of the week suggests investors remain focused not only on current demand, but also on the sustainability of future growth. As with inflation, markets have already moved on to the next question.

Markets spent much of this week looking through the latest data and towards what comes next. Inflation has fallen on both sides of the Atlantic, yet energy prices have begun moving higher again. Semiconductor companies continue to report strong demand, yet investors have become increasingly focused on what growth might look like a year from now rather than today.

Attention now turns to the Federal Reserve’s meeting at the end of the month, developments around the Strait of Hormuz and the fiscal strategy of the incoming UK government. By the time we have greater clarity on those issues, markets may well have moved on to the next set of questions.

Mark Wilson, Investment Analyst

Risk warning: With investing, your capital is at risk. The value of investments and the income from them can go down as well as up and you may not recover the amount of your initial investment. Certain investments carry a higher degree of risk than others and are, therefore, unsuitable for some investors.

The Week In Markets – 4th July – 10th July 2026

Just a few weeks ago, markets were celebrating what appeared to be a lasting ceasefire between the United States and Iran. That optimism has been short-lived. Renewed attacks on commercial shipping in the Strait of Hormuz, followed by fresh US military strikes on Iranian targets, have reignited tensions and reminded investors how quickly geopolitical risks can return to the forefront.

President Trump declared the ceasefire agreement effectively “over” during the NATO summit in Ankara, prompting an immediate reaction across financial markets. Brent crude oil surged above $78 per barrel, while equity markets retreated as investors sought safer assets amid concerns that renewed disruption to global energy supplies could once again feed through into inflation. The reaction serves as a reminder that markets had become increasingly comfortable with the view that the conflict was moving towards resolution.

Government bond markets also reflected growing caution. US Treasury yields initially rose on inflation concerns linked to higher oil prices before stabilising, while investors continued to assess the implications for central bank policy. The renewed geopolitical uncertainty arrives at an awkward time for policymakers, with inflation already proving more persistent than many had hoped.

Closer to home, Andy Burnham moved significantly closer to becoming the United Kingdom’s next Prime Minister. On the first day of Labour’s nomination process, Burnham secured the backing of 322 Labour MPs, leaving him effectively unchallenged in the race to replace Sir Keir Starmer. Unless a surprise challenger emerges before nominations close, Burnham is expected to be formally confirmed as Labour leader next week and become Prime Minister shortly afterwards.

Burnham’s rise has been remarkably swift. Only weeks ago, he returned to Westminster following his by-election victory in Makerfield. His platform centres on devolving power away from London, strengthening regional economies and delivering what he describes as “good growth in every postcode”. Investors will be watching closely for further details on tax policy, public spending and infrastructure commitments once the transition of power is complete.

Meanwhile, attention also turned towards China, where June inflation data highlighted the continuing imbalance within the world’s second-largest economy. Consumer prices rose by 1.0% year-on-year, down from 1.2% in May and slightly below expectations. While inflation remains positive, the moderation suggests domestic demand continues to recover only gradually. Food prices remained weak, reflecting cautious household spending and ongoing challenges within the property sector.

In contrast, producer prices rose 4.1% year-on-year, the strongest increase since 2022. Higher commodity costs, supply chain disruptions linked to the Middle East conflict and strong demand for AI-related technology continue to support manufacturing activity. The widening gap between consumer and factory-gate inflation reinforces the two-speed nature of China’s economy, where exports and advanced manufacturing remain robust while domestic consumption continues to lag.

Market performance this week largely reflected these competing themes. Energy stocks outperformed as oil prices rallied following the renewed tensions in the Middle East, while broader equity markets struggled. The FTSE 100 fell sharply on Wednesday as investors digested the implications of higher energy prices and a potential resurgence in inflationary pressures. US markets also moved lower, with the S&P 500 and Nasdaq retreating as risk appetite weakened.

Despite the volatility, it is worth remembering that markets have repeatedly demonstrated their ability to look through geopolitical events once the immediate uncertainty passes. The key question for investors remains whether higher oil prices prove temporary or become sufficiently persistent to influence inflation expectations and central bank policy. For now, maintaining a disciplined and diversified approach remains the most effective way of navigating an environment where political and economic headlines can change rapidly.

Andy Triggs, Head of Investments

Risk warning: With investing, your capital is at risk. The value of investments and the income from them can go down as well as up and you may not recover the amount of your initial investment. Certain investments carry a higher degree of risk than others and are, therefore, unsuitable for some investors.

The Week in Markets – 27th June – 3rd July 2026

The King of the North is one of the most prominent figures to Game of Thrones fans, and Andy Burnham appears determined to reinforce that reputation as he looks set to move part of the organisation’s operations to Manchester. The move would serve as a means of shifting power away from London and into the regions, aligning with ambitions for a rewired Britain.

The former Mayor of Greater Manchester is on course to become the UK’s next Prime Minister within weeks, yet this week he spoke of a “10-year plan” for the country. Such rhetoric suggests a measured, long-term approach, with Burnham seeking to address the cost-of-living crisis while maintaining fiscal discipline and avoiding adding pressure on the public finances. He also hinted at greater public control over essential services, including water, energy and transport, signalling a willingness to expand the state’s role in key areas of the economy.

The outgoing Prime Minister, Sir Keir Starmer, does not appear willing to let Burnham take over empty-handed, with an additional £15 billion for defence spending seemingly forming part of the handover. However, this comes at the expense of several infrastructure projects, which are set to be scrapped. We covered the departure of Defence Minister John Healey a few weeklies ago. The agreed package is only £1.5 billion more than the amount previously presented to him, falling short of the £28 billion he had advocated for.

There was positive news for the UK economy, with first-quarter GDP figures showing growth of 0.6%. This marked the strongest quarterly performance since Q1 2025 and reflected the resilience of the economy before it was affected by the fallout from the US–Iran conflict. The services sector remained the main driver of growth, expanding by 0.8%, while both production and construction also recorded growth. It was a positive note on which Rachel Reeves potentially ends her tenure as Chancellor, with Andy Burnham widely expected to appoint a new candidate.

British American Tobacco (BAT) is a multinational company based in London that manufactures and sells tobacco and nicotine products. This week, the company confirmed plans to cut approximately 20% of its workforce as part of what it describes as an “AI-driven overhaul”. At times, AI appears to be a convenient justification for businesses seeking to reduce costs, rather than a reflection of the benefits the technology can genuinely deliver. The restructuring is expected to result in up to 9,000 job losses as BAT continues to grapple with sluggish sales and profit growth. Consumers have increasingly switched to alternatives as tobacco duties have risen over the past two years, while BAT has also struggled to establish a strong presence in the vape and nicotine pouch markets. Shares fell -2.3% over the week.

It is the first week of the month and, with that, the first Friday usually brings the release of the US Non-Farm Payrolls figures. However, with Independence Day falling on a Saturday this year, the US observed the holiday on Friday, meaning the figures were released a day earlier. In June, 57,000 jobs were created, well below market expectations of 110,000. The Bureau of Labor Statistics has faced criticism throughout President Trump’s second term due to frequent and sizeable revisions, and this month was no exception. May’s figure was revised to 129,000, while April’s was revised down to 148,000, resulting in a combined reduction of 74,000 jobs across the two months. This points to a significant cooling in the labour market, following a period of stronger hiring that reflected preparations for the FIFA World Cup. The leisure and hospitality sector shed 61,000 jobs, offsetting continued strength in the education and healthcare sectors, which added 69,000 roles.

In reaction to the payroll figures, US equity markets delivered a mixed performance. The S&P 500 closed largely flat on the day, while the technology-heavy Nasdaq fell -1.6%. Despite an extremely volatile second quarter, both indices recorded their strongest quarterly gains since 2020, with the S&P 500 rising 14.9% and the Nasdaq gaining 21.5%.

 

Nathan Amaning, Investment Analyst

Risk warning: With investing, your capital is at risk. The value of investments and the income from them can go down as well as up and you may not recover the amount of your initial investment. Certain investments carry a higher degree of risk than others and are, therefore, unsuitable for some investors.

The Week In Markets – 20th June – 26th June 2026

The essence of politics is compromise, and that principle may have been central to Sir Keir Starmer’s decision to step down as Prime Minister on Monday. After weeks of mounting pressure from Labour MPs to provide a timetable for his departure, against a backdrop of rising support for the Reform Party, Starmer chose to effectively hand over the reins to Andy Burnham.

Governing the United Kingdom increasingly appears to be an impossible task, with Starmer becoming the sixth Prime Minister to leave office in recent years. There is unlikely to be a contest for the party’s top job, as Wes Streeting, the former Health Secretary and a potential contender, has already declared his support for Andy Burnham. It is widely expected that Streeting will be rewarded with a senior role in Burnham’s government, with some speculating that he could be appointed Chancellor of the Exchequer.

Huw Pill, the Bank of England’s Chief Economist, was one of two members of the Monetary Policy Committee who dissented at its most recent meeting, voting in favour of a 25 basis point (0.25 percentage point) interest rate increase. Speaking on Wednesday, Pill outlined his views on monetary policy, arguing that it must remain adaptable and be designed to operate effectively in an environment of persistent uncertainty. He noted that, as central banks increasingly face unpredictable economic conditions, traditional forecasting models may become less reliable, requiring more emphasis of scenario analysis and stress-testing policy decisions. In particular, he warned that inflation could prove more persistent than currently expected and stressed that the Bank should remain prepared to tighten monetary policy further should inflationary pressures re-emerge.

In the United States, the Federal Reserve’s preferred measure of inflation, the Personal Consumption Expenditures (PCE) price index, rose to 4.1% year-on-year in May. This marked the first time inflation had exceeded 4% in three years, reflecting the continued impact of higher energy prices following the US-Iran conflict. With both countries having since signed an initial peace agreement, oil markets have stabilised, and WTI crude has fallen below $70 per barrel, leaving prices lower than they were before the conflict began. As a result, some easing in energy-driven inflationary pressures is expected in the coming months. Nevertheless, financial markets have increasingly priced in the possibility of a Federal Reserve rate hike, with some investors anticipating that further monetary tightening could come as early as September.

US equity markets came under broad selling pressure at the start of the week amid growing concerns that valuations in AI-related stocks had become increasingly stretched. Investor sentiment was further weighed down by the prospect of a Federal Reserve interest rate hike, which added to fears that higher borrowing costs could dampen economic growth and corporate earnings.

However, sentiment improved following results from Micron, the US semiconductor company specialising in memory chips. After shares had fallen sharply during the first two trading days of the week, the company reported quarterly revenue and profit forecasts that comfortably exceeded analysts’ expectations. Micron also revealed that customers had committed approximately $22 billion in future purchases of its memory products. The announcement sparked a strong rally in the stock, with shares rising more than 20% by the close of trading on Wednesday. Further supporting investor optimism, Micron’s CEO stated that the company sees no immediate signs of memory chip supply catching up with rapidly growing demand.

There was also some sad news this week, as Alan Greenspan, widely regarded as one of the greatest Chairs of the US Federal Reserve, passed away at the age of 100. Greenspan guided the US economy through the 1990-1991 recession and the dot com boom of the late 1990s, while overseeing the second longest economic expansion in US history, a decade of sustained growth from 1991 to 2001. Throughout his tenure, he resisted calls to raise interest rates in response to inflation concerns that ultimately failed to materialise. His ability to balance economic growth with price stability and not bend to pressure earned him the reputation as one of the most influential and respected central bankers of his generation. A true maestro.

Alongside oil, precious metals have come under pressure this week. A backdrop of increasing US rate expectations and a rising USD led to gold dipping below $4,000 an ounce and silver below $60 an ounce. Whether the Federal Reserve will ultimately raise interest rates remains unclear. With oil now at pre-conflict levels, we believe many inflationary pressures could turn out to be transitory and we could once again be considering interest rate cuts not hikes in key markets.

Nathan Amaning, Investment Analyst

Risk warning: With investing, your capital is at risk. The value of investments and the income from them can go down as well as up and you may not recover the amount of your initial investment. Certain investments carry a higher degree of risk than others and are, therefore, unsuitable for some investors.

The Week In Markets – 13th June – 19th June 2026

It seems the end may be near, not of the world, but of the US–Iran conflict, the effects of which have rippled across the globe. News of a breakthrough first emerged from the Pakistani delegation, before Donald Trump announced via his Truth Social platform that a deal had been reached. However, markets remained cautious and waited for Iran to confirm the development. The interim agreement reportedly includes an end to the US blockade of Iran and the reopening of the Strait of Hormuz.

A formal 14-point framework has been agreed between the two countries. The key elements of the plan include an immediate and permanent ceasefire, alongside a halt to Israel’s attacks on Lebanon. The agreement also provides for the reopening of the Strait of Hormuz with no toll imposed by Iran, the release of frozen Iranian assets and a commitment from Iran to cease the development of any nuclear weapons. Following the anticipated signing of the deal by both sides, oil markets have reacted sharply, with Brent crude falling 12% over the week to $76.00.

The impact of the conflict has been widespread and continues to be reflected in economic data. US retail sales for May rose by 0.9%, while the previous month’s figure was revised down to 0.4%. Receipts at gasoline stations remained the largest contributor, increasing by 3.4%, with motor vehicle sales also rising by 1.2%. The K shaped nature of the economy remains evident, as spending continues to be driven primarily by higher income consumers, while lower income households feel the greatest pressure from rising fuel costs. As tax refunds associated with President Trump’s One Big Beautiful Bill diminish, lower income households are likely to rely more heavily on credit to meet their expenses.

The US Federal Reserve met on Wednesday and held interest rates steady at 3.75%. This meeting marked the first under Governor Kevin Warsh, who indicated that reforms would be introduced at the central bank. The most significant change was his decision to refrain from providing forward guidance on the future path of rates, instead noting that “the good news is we will be meeting in six weeks”. This approach is intended to ensure that decisions are made on a meeting by meeting basis, grounded in the latest economic data, while also encouraging markets to focus less on decoding Fed commentary. Updated projections suggest that inflation will slow sharply next year, reducing the likelihood of President Trump securing the looser monetary policy he repeatedly called for under Warsh’s predecessor, Jerome Powell.

In the UK, CPI held steady at 2.8% for May. Markets had expected a rise to 3%, with the release coming ahead of the Bank of England’s meeting on Thursday and likely supporting the decision to hold interest rates unchanged. Lower food prices helped offset continued increases in airline fares and petrol costs. Core inflation, which excludes food and energy, edged higher from 2.5% to 2.6%.

The Bank of England did indeed hold interest rates at 3.75%, although two of the nine policymakers voted for a rate increase. Policymaker Catherine Greene joined Chief Economist Huw Pill in calling for a 25bps (0.25%) rate hike, citing the need to mitigate the risk of elevated energy prices feeding into broader inflation. Governor Andrew Bailey acknowledged that inflation remains elevated at 2.8% but indicated a willingness to tolerate this in the short term, while taking encouragement from falling oil prices following the easing of the US–Iran conflict. Markets continue to price in a 25bps (0.25%) rate increase by the end of the year.

On Thursday, Andy Burnham secured a decisive victory in the Makerfield by-election, bolstering his campaign to challenge Prime Minister Starmer. Burnham won a majority of 9,231 votes for the Labour Party over Reform UK and signalled his ambitions clearly, stating that this was the “final chance for change”. The result means Burnham will take his seat in Westminster next week, where he has already set out his position with a commitment to abide  by the government’s fiscal rules. While Labour has not experienced a formal leadership revolt, previous prime ministers have stepped aside in the face of sustained internal pressure, and there is growing speculation that further ministerial resignations could follow in the coming week. In response, Starmer stated this morning that, should a leadership contest arise, he intends to stand and will not step aside.

The Bank of Japan also met this week and, unlike its peers, opted not to pause, instead raising interest rates by 25bps (0.25%) to 1%. This marked its first-rate hike of the year and brought rates to their highest level in 31 years, as policymakers continue the process of policy normalisation. Governor Ueda was absent due to illness, but Deputy Governor Uchida indicated that the Bank would continue to raise rates if inflation persists. There were also indications that price pressures are feeding through into wage growth. Japanese equities reacted positively, with the Nikkei index rallying to a new record high and gaining 6% over the week.

While progress between the US and Iran is encouraging, renewed tensions in Lebanon this morning underline the still‑fragile and evolving nature of geopolitical risks. In this environment, maintaining a disciplined and diversified approach to portfolio construction remains essential. Ensuring exposure across a range of asset classes, regions and sources of return can help manage volatility and reduce reliance on any single outcome, supporting portfolio resilience as conditions continue to evolve.

Nathan Amaning, Investment Analyst

Risk warning: With investing, your capital is at risk. The value of investments and the income from them can go down as well as up and you may not recover the amount of your initial investment. Certain investments carry a higher degree of risk than others and are, therefore, unsuitable for some investors.

The Week In Markets – 6th June – 12th June 2026

Against a more uncertain global backdrop, the European Central Bank (ECB) has become the first of the major central banks to adjust policy, raising rates by 25bps (0.25%) to 2.4%. President Lagarde described the decision as “pretty obvious”, with recent developments, including rising geopolitical tensions and the closure of the Strait of Hormuz, contributing to higher energy prices and prompting closer attention to potential spillovers into the wider economy.

The decision was taken unanimously, with policymakers mindful of the rise in consumer prices to 3.2% in May. Following the meeting, the ECB raised its inflation expectations to an average of 3% through to the end of the year, before easing to 2.3% in 2027. The ECB previously embarked on a steep rate hiking cycle between 2022 and 2023 to tackle inflation following Russia’s invasion of Ukraine. However, with eurozone growth declining by 0.2% in the first quarter, the central bank appears likely to adopt a more cautious approach to further tightening. Market expectations suggest that rates could increase by a further 25bps (0.25%) by the end of the year.

The Bank of Canada (BoC) also met this week, holding rates steady at 2.25%. This marked the fifth consecutive meeting without a change, as it seems policymakers are less concerned about inflation becoming broad based. As a net exporter of crude oil, Canada has benefited from higher revenues during the ongoing geopolitical tensions in the Middle East. Governor Macklem acknowledged the contraction in economic growth in the first quarter, noting that the economy appears weak rather than in a recession. Attention is also turning to the upcoming review of the United States–Mexico–Canada Agreement (USMCA), scheduled for early July, with officials increasingly concerned about the potential economic impact, particularly given the likelihood of stricter trade restrictions from the US.

UK GDP figures released this Friday morning for April showed the economy contracted by 0.1% month on month. The reversal in growth, following two consecutive months of expansion, reflects the impact of the US–Iran conflict. Services output, typically the UK’s primary driver of growth, declined by 0.2% over the month. At the same time, rising petrol prices appear to have weighed on consumer spending, contributing to a contraction in retail activity after growth in the previous month. The Bank of England is set to meet next week, although a rate hike appears unlikely as policymakers continue to exercise patience.

UK Chancellor Rachel Reeves commented following the weak data, maintaining that Labour’s economic plan had been working prior to the geopolitical conflict, pointing to strong growth at the start of the year and signs that inflation was moving towards the 2% target. She argued that the UK is in a strong position to absorb the economic impact of the conflict.

Elsewhere, this week in the Houses of Parliament, Defence Secretary John Healey became the latest minister to resign under Prime Minister Sir Keir Starmer, albeit for different reasons to many others. His departure follows a prolonged dispute over military spending, with Healey arguing that the Prime Minister had failed to commit sufficient resources to ensure national security. Starmer had previously pledged to increase defence spending to 3% of GDP; however, current plans suggest it will only reach 2.6% by 2030, highlighting the challenges the government faces in allocating additional resources.

We’ve managed to avoid talking about the US this long, but this week saw inflation rise at its fastest pace in over three years, reaching 4.2% in May. This highlights the impact of the ongoing conflict, with inflation having started the year at 2.4% and on a downward trajectory. The rising cost of living is also increasing pressure on President Trump and the Republican Party ahead of the midterm elections in November. Despite Trump’s 2024 pledge to bring inflation down, both markets and households appear increasingly reluctant to take his word at face value.

The conflict between the US and Iran remains unresolved. At the start of the week, Iran launched a missile attack on Israel. President Trump stated that he had instructed Israeli Prime Minister Netanyahu to refrain from retaliatory action; however, Israel responded the following day. A continued exchange of attacks between the US and Iran has further undermined any ceasefire that had been in place. Efforts by Pakistan and Qatar to mediate a resolution are ongoing, although progress appears limited. By the close of trading on Thursday, President Trump claimed that further attacks on Iran had been halted, with the final terms of a deal expected to be agreed in the coming days. Despite numerous false claims regarding a deal, markets did take Thursday’s announcements positively, with risk assets and precious metals rebounding strongly after weakness during the previous days.

Nathan Amaning, Investment Analyst

Risk warning: With investing, your capital is at risk. The value of investments and the income from them can go down as well as up and you may not recover the amount of your initial investment. Certain investments carry a higher degree of risk than others and are, therefore, unsuitable for some investors.

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