Weekly market review and outlook: Politics drives the markets

Next week, we should start seeing the impact of Brexit shenanigans on the UK economy.

Article updated: 9 September 2019 9:00am Author: Helal Miah

Review: 2nd – 6th August

What a week in politics! It overshadowed most other news developments and drove markets via movements in sterling, which reached below $1.20 early on in the week (lower than that of 2016/17) as the tory leadership seemed intent on taking us towards a no deal scenario. Sterling saw a recovery as the week progressed with the Rebel Alliance giving the prime minister a succession of blows in parliament, leaving him with no majority and, as things stand, seemingly having to ask Europe for an embarrassing extension with the timing of a general election also out of his control.

However, a strengthening sterling limited the gains on the UK stock market as other stock markets around the world made some material recoveries on the summer selloff which was induced by global growth and trade worries. Data released around the world suggested that global growth was slowing down, but maybe not to the extent we’ve been worrying about so much. Some of the PMI data releases across the services, manufacturing and industrial sectors from China, Europe and America surprised to the upside, with the exception being the UK where all three sectors reflected increased pessimism.

This article is written ahead of the latest set of US jobs numbers, once again expected to show a resilient US jobs market. However, some weakness in the jobs market may do Jerome Powell a favour and incline the Fed to become a little more aggressive in cutting interest rates, getting the US president off his back.

The week ahead: 9th – 13th September

Activity in the parliament building itself will come to a halt as prorogation takes effect. Nonetheless political events will still be very fluid, with sterling continuing to act like an emerging market currency and determining stock market movements; especially as we are scheduled to have very little corporate news flow.

However, there will be several pieces of UK data releases to reflect the impact of Brexit shenanigans upon the UK economy. We start off on Monday with the latest monthly GDP data for July where the month on month figure could see a modest bounce of 0.1% from the prior month’s flat figure. At the same time we have July’s Industrial, Manufacturing and Construction sector production figures, every single one of which is expected to show further weakness on a month on month and a year on year basis.

The UK unemployment data on the other hand should continue to show the jobs market remaining sturdy with the unemployment rate holding at 3.9%, but the rate of wage growth is expected to show a modest decline.

Outside of the UK, focus will be towards the ECB’s interest rate decision on Thursday, where no change is expected but the commentary will be closely scrutinised, while the US interest rate picture should not, in theory, be a cause for concern.


All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.

Helal Miah portrait photo
Helal Miah

Investment Research Analyst

After graduating with an economics degree from University College London, Helal started his career within private banking at Smith & Williamson Investment Management and later held analyst and fund manager roles with the Industrial Bank of Japan, Schroders and Mitsubishi Corporation. He is a chartered fellow of the Chartered Institute for Securities & Investment. 

All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.