The pressure on global wheat prices is a complex issue driven by various factors, including climate, yields, oil prices, and imports, as well as the ongoing conflict in Ukraine [1]. The recent political instability in Russia, including the Wagner mutiny, has further amplified this pressure, leading to a 2% increase in wheat prices [2]. This has had a knock-on effect on existing wheat supplies, driving up outgoing prices [3]. Meanwhile, the Nasdaq Composite Index, a key indicator of the health of the tech sector, fell by 2.05%. This may suggest a troubled economic outlook, influenced by a selloff in chip stocks after Taiwanese chipmaker TSMC predicted a drop in sales.
References: [1] An Overview of Global Wheat Market Fundamentals in … [2] GRAINS-U.S. wheat rises on concern about stability in … [3] Top Wheat Stocks To Buy Amidst Potential Shortages? 3 In …
UK retail sales in June outperformed expectations, rising by 0.7% compared to May
ccording to data released by the Office for National Statistics, UK retail sales in June outperformed expectations, rising by 0.7% compared to May. This is a considerable jump from the downwardly revised increase of 0.1% observed in May [3]. This surge was attributed to higher wage growth stimulating consumer spending, even amidst high inflation [1][2]. Compared to the same month last year, however, sales were down by 1.0%, which was still a better outcome than the anticipated 1.5% decrease [2]. Despite this promising performance, the long-term outlook remains uncertain as overall consumption appears to be stagnating [2].
References: [1] Sterling rises after UK retail sales beat forecasts [2] UK consumers defy high inflation and shop more in June [3] UK Retail Sales Rose More Than Expected in June on …
FTSE 100 registered the best weekly performance witnessed in over three months
On July 14, the FTSE 100 edged slightly lower due to a drop in oil stocks. Despite this, it registered the best weekly performance witnessed in over three months. Although the FTSE 250 also fell, there were some notable performances. For instance, Spirax-Sarco Engineering saw a 3.1% gain following an upgrade from UBS. Investors are now eagerly awaiting the UK’s June consumer prices data due next week, which will likely provide insights into the Bank of England’s potential monetary policy changes. The recent inflationary pressures, which have been more embedded in the economy, are fueling these anticipations[1]. On the final trading day, the FTSE 100 index closed strong, rising by 134 points to close at 7,416 points, a 1.8% gain[3].
References: [1] FTSE 100 closes lower at the end of best week in three … [2] FTSE 100 analysis: Stocks fall as UK inflation remains hot [3] FTSE 100 sees best one-day gain since June following …
However…GfK Consumer Confidence indicator in the UK experienced a decline in July 2023
Despite the recent rise in UK retail sales in June and a strong performance in the FTSE 100 index, the GfK Consumer Confidence indicator in the UK experienced a decline in July 2023. This drop to -30 from -24 in June marked the first decline in six months, with a significant impact attributed to persistent inflation and rising interest rates [1]. The confidence drop reflects a cost-of-living crisis, affecting both homeowners and renters, and the impact of inflation on the economy. Forecasts for personal finances and the UK economy for the coming year also saw a decrease, while consumers are reducing spending on big-ticket items, as indicated by the major purchase index [1]. This decline in consumer confidence could hint at potential challenges for the UK economy, despite recent positive economic indicators.
References: [1] United Kingdom Consumer Confidence – June 2023 Data [2] UK consumer confidence falls in July for first time in six … [3] UK consumer confidence falls to lowest level since 1974
The technology sector led the US and European markets downwards due to heavy losses.
The sector, which had gained nearly 23% this year, was the biggest loser in Europe with a 2.5% drop [2]. This was primarily due to a selloff in chip stocks after Taiwanese chipmaker TSMC predicted a drop in sales. The Stoxx 600, despite being at a one-month high, was impacted by this decline in the tech sector [2]. In the US, the collapse of Silicon Valley Bank also caused volatility in bank shares, further contributing to the market downturn [3]. As a result, there has been a widespread loss of confidence in US and European banks [3].
References: [1] Europe markets close mixed after U.S. jobs report; OSB … [2] European shares end at 1-month high, tech stocks tumble [3] Quarterly markets review – Q1 2023
The Brent crude experienced a slight uplift due to China’s vow to bolster its economic growth.
China’s primary economic planner pledged to implement policies aiming to “restore and expand” consumption, which is anticipated to increase the demand for oil significantly[1]. This was coupled with Russia’s plan to curb its oil exports by 2.1 million metric tons in the third quarter, which further contributed to the boost in Brent futures[1]. The prices did dip to $79.46 a barrel at one point, but the overall trends suggested a positive outlook for Brent crude[2]. The affirmation from a member of the European Central Bank that future rate hikes were not a certainty also played a role in this trend[1][2].
References: [1] Oil prices dip on profit-taking despite tighter U.S. supplies [2] Oil prices dip on profit-taking despite tighter U.S. supplies [3] Oil prices up on China economic support pledge
The recurring attacks on Black Sea ports in Ukraine have continued to exert pressure on global wheat prices.
The uncertainty surrounding the grain trade due to these attacks has led to significant fluctuations in wheat costs [2]. The Black Sea region plays a critical role in the global grain market, with Ukraine being a major exporter of wheat, barley, maize, rapeseed oil, and sunflower oil [3]. Therefore, disruptions in this region can have far-reaching impacts on the availability and cost of these commodities. Furthermore, the collapse of the Black Sea grain deal between Russia and Ukraine could lead to heightened food insecurity worldwide, affecting millions of vulnerable individuals [3]. This situation is predicted to cause higher food prices and increased hunger [3]. Thus, the ongoing conflict and its implications on the grain trade are contributing to the pressure on wheat prices, with potential consequences for global food security. [1][2][3]
References: [1] GRAINS-Wheat pares gains after hitting 3-week high on … [2] Global wheat prices focus on escalating Black Sea attacks [3] Collapse of Black Sea grain deal poses a massive threat
