We have been reminded this week that we continue to live under a coronavirus Sword of Damocles, as Europe appears to be headed back towards tougher restrictions and lockdowns following a resurgence of new infections.
And after a reasonable start to the week, predictably, global equity markets moved lower over the past couple of days.
While we certainly aren’t trying to make light of this horrible surge in cases, it did help to weaken the oil price (as economic lockdowns will slow economic activity and therefore the demand for oil) – and of course, a weaker oil price will help to ease some of the current inflationary pressures.
Furthermore, a slowdown in economic activity as a result of coronavirus restrictions, especially ahead of the all-important Christmas trading period, does highlight the need for central bank policymakers to keep interest rates low.
Looking ahead to the coming week we have very little in the way of economic data. Of most interest will be US, UK & Eurozone PMI data; US durable goods orders; and the minutes from the last Fed monetary meeting held on 3 November 2021.
The Investment Management Team