Market Update

The majority of major equity markets continued their previous week's rally, driven by optimism that the momentum of the coronavirus outbreak might be slowing down.
However, the UK market showed notable underperformance, particularly after Rishi Sunak assumed the role of Chancellor of the Exchequer following Sajid Javid’s resignation. Sunak's preference for increasing infrastructure spending and adopting further fiscal stimulus strategies became apparent. While these measures could potentially stimulate economic growth, there is a downside – such fiscal stimulus might discourage the hawks at the Bank of England (BoE) from approving a cut in UK interest rates. Consequently, the pound strengthened, and a robust pound tends to adversely affect the FTSE-100. This happens because it reduces returns for exporters and diminishes the value of overseas earnings.
Looking ahead to this week, key events include the release of UK employment data encompassing the unemployment rate and weekly earnings, UK Consumer Price Index (CPI), and UK retail sales figures. Additionally, investors will be keen on the minutes from the latest Federal Reserve meeting and the Japanese Q4 GDP report.
Furthermore, as the tax year end approaches, we'd like to remind you that now is the opportune moment to utilize your ISA allowance, which currently stands at £20,000. If you haven't already done so, taking action before April 5, 2020, is essential to prevent forfeiture of this allowance. Feel free to contact us, using the information provided in your email, to initiate the process.