May 2023 Market Update

Overview

The US debt ceiling impasse garnered most of the market’s attention in May, an impasse that was positively resolved late in the month.

Elsewhere, and as expected, the Bank of England and the ECB both raised interest rates by 25 basis points to continue to put downward pressure on inflation. Unfortunately, the data continue to show that inflation remains stubbornly high in both the UK and EU and indeed most developed economies. And the divergence noted in previous months between the strength in services sectors and weakness in manufacturing sectors continued to widen.

Markets were more mixed over the month, with a number of developed equity markets (with the notable exception of Japan and a lesser extent the US) falling in local currency terms whilst bonds also fell.

Full update below…