11th September 2023
Perspective News, The Cambridge Weekly
The Cambridge Weekly – 11th September 2023
Energy in focus – oil prices up and an ill wind for renewables
Markets have been generally quiet at the start of September, but energy is again becoming an issue for equity and credit markets. Oil prices have risen since the start of the summer, with Brent crude having bounced along a bottom of $73 per barrel for the first half of 2023.
Compared to the wild swings of 2019 to 2022, it doesn’t feel like much, and it has only affected market- based inflation expectations marginally. However, it has been a factor in pushing bond yields back above 4.2% in the US and German yields to 2.6%.
August 2023 asset returns review
August was a dreary month in a few ways. Matching the UK’s below-average temperatures, global asset market sentiment cooled into the end of summer. This translated into a 1.3% global equity drop in sterling terms, reversing a big chunk of July’s gains.
The damper mood marked a change from what had been a fairly supportive environment for most of the spring and summer. Factors blamed for the pullback have been present for some time but became slightly more visible: persistently high interest rates and a flattish global economy. Although economic data from Europe and China brought yet more disappointment, central bankers once again reaffirmed their commitment to inflation busting.