Weekly Market Review
Markets seesaw between heightened geopolitical risks and central bank easing
Following widespread falls in equity markets at the beginning of the week, triggered by a drone attack on Saudi Arabia’s oil infrastructure over the weekend, markets gradually recovered as several central banks either cut rates or pointed towards future easing if global economic weakness persisted. The oil price, which spiked by a massive 19.5% in intraday trading on Monday, gave up much of its gains as the Saudis reassured markets as to their ability to fully restore the oil supply by month end.
As of 12pm London time on Friday, the US equity market over the week was broadly unchanged at a headline level. European markets were up 0.4%, whilst the UK’s stock market was down 0.1%, not helped by a rally in Sterling back above $1.25 and €1.13 on comments from the European Commission President, Jean-Claude Junker, that a Brexit deal was possible. As Sterling appreciates, overseas earnings decline when translated back to the UK. Japanese equities climbed 0.4%, Australian equities rose 0.9%, whilst Emerging Markets fell 1.0%.