Market update – 8th June 2022.

Following a long weekend of jubilation here in the UK, markets have broadly been flat.

On Monday, we saw a vote of confidence in the UK Prime Minister; ultimately Boris Johnson secured the confidence of his colleagues, but the margin was tighter than anticipated. Whilst this has sparked much interest in the press, UK markets were relatively unfazed by both the process and the outcome.

We also had the release of Services PMI data for China, which came in at 41.4. Whilst on initial inspection this number is low (below 50 indicates contraction), much has changed in China since the reading was measured. Towards the end of May, major cities in China moved out of lockdown and loosened restrictions, which has provided a boost to markets in China – they continued to climb this week.

Earlier in the year – as many nations imposed sanctions against Russian energy – India has taken advantage of discounted oil offered up from Russia. On Monday, there were reports that India is in fresh talks, and is looking to further increase Russian oil imports. This comes after hours of negotiation between EU leaders culminated in a ban on seaborne imports of Russian oil across the Union (which we touched on last week). This is further evidence of global energy redistribution, which will ultimately help to ease pressures behind inflation – we believe that some of the inflationary energy pressures we are seeing aren’t caused by a permanent lack of supply issue, but rather a reallocation issue.

Much of this week’s anticipated data is still to come – some highlights include US CPI for May and Eurozone GDP.

Hannah Owen, Portfolio Specialist.

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