As you can see from the accompanying table, global equity markets enjoyed a solid start to start 2023.
The release of the minutes from the last Fed monetary policy meeting, which was held on 14 December 2022, had a hawkish tone, as policymakers appear to be pushing back against our view that US interest rates should be cut later this year due to slowing economic growth. However, it should be noted that, as with most things in life, it will be easier for Fed policymakers to talk tough now about the need for higher interest rates, than it will be to maintain that determination once US economic activity starts to contract.
Although this afternoon’s (Friday 6 January 2023) US non-farm payroll data suggests the US employment market remains robust, with payroll growth coming in slightly higher than expectations at 223,000, November’s payroll growth was revised down slightly.
Furthermore, wage growth came in lower than expected at 4.6%, down from 5.1%, while the previous month’s growth figure was revised down – a clear sign the pressure in the employment market is actually starting to ease.