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D-PIMS Weekly Market Update - Week of 13th to 19th September 2021

Today’s Monday Update:

Over the course of the last week, headlines were mostly economy and Covid related, with some political reports:

• On Monday, British businesses demanded that Chancellor Rishi Sunak, stop raising their taxes and instead offer more help to meet the challenges of Brexit, COVID-19, and climate change, when he makes major budget statements next month. The Confederation of British Industry urged Sunak, to "flip business taxation on its head" when he sets out new tax proposals and a three-year spending plan on 27th October. CBI Director General Tony Danker told Sunak to stop hitting companies that invest in making their premises less carbon-intensive with increased property tax payments, a quirk of the business rates system.

London will remain a leading global financial centre, despite uncertainty over regulation due to Brexit, Lloyds Bank's annual sentiment survey of financial firms showed on Monday. Britain fully left the European Union, its biggest single export customer, in December last year, with thousands of jobs and billions of euros in daily trading moving from London to the continent, raising concerns about the capital's clout in global finance. But the survey of more than 100 banks, asset managers and insurers showed that more than two-thirds believe that London will remain a top centre. "It seems sensible to conclude that, while London's status has taken a knock due to Brexit, it will remain one of the world's leading financial centres," the survey said. Regulatory change is seen as the biggest threat, consistent with the "ongoing uncertainty" over the shape of regulatory reform, many involved in the survey said.

The NHS on Monday began the world's biggest trial of Grail Inc's flagship Galleri blood test, that can be used to detect more than 50 types of cancer long before symptoms appear. The Galleri test looks at the DNA in a patient's blood to determine if any come from cancer cells. Earlier diagnosis of cancers leads to dramatically increased survival rates. The NHS said it wanted to recruit 140,000 volunteers in England to see how well the test worked as part of a randomised control trial. Half of the participants will have their blood sample screened with the Galleri test right away.

• COVID-19 vaccines have saved more than 112,000 lives and averted 24 million cases of the disease, British officials said on Tuesday as they recommended all vulnerable people, frontline health staff and those aged over 50 be offered a booster shot. The Joint Committee on Vaccination and Immunisation's recommendation of a third dose six months after a second shot, paves the way for a broad revaccination programme in Britain, which has one of the world's highest death tolls from COVID-19.

Britain said on Tuesday it was delaying the implementation of some post-Brexit import controls, the second time they have been pushed back, citing pressures on businesses from the pandemic and global supply chain strain. Britain left the European Union's single market at the end of last year, but unlike Brussels which introduced border controls immediately, it staggered the introduction of import checks on goods such as food to give businesses time to adapt. Having already delayed the introduction of checks by six months from 1st April, the government has now pushed the need for full customs declarations and controls back to 1st January 2022.

British employers added a record 241,000 staff last month, lifting the total number of employees on company payrolls to just above the level before Britain first went into a COVID-19 lockdown last year, official data showed on Tuesday. The robust jobs data comes as Britain's government prepares to end its furlough programme on 30th September, which helped around a third of employees at its peak, and last month was still supporting around 700,000 workers full time.

The European Commission is expected to outline by the end of September plans that could ease the movement of goods from Britain to Northern Ireland, in an effort to ease tensions resulting from Brexit, EU diplomats said. The EU rejected a UK demand to renegotiate the new trading position of the British province. But a deputy head of the bloc’s executive Commission, Maros Sefcovic, last week promised “creative and solid new solutions” under the current deal.

Underlying U.S. consumer prices increased at their slowest pace in six months in August, suggesting that inflation had probably peaked in the U.S., though it could remain high for a while amid persistent supply constraints. The U.S. Labour Department said on Tuesday, its Consumer Price Index excluding the volatile food and energy components edged up 0.1% last month. That was the smallest gain since February and followed a 0.3% rise in July. The so-called core CPI increased 4.0% on a year-on-year basis after advancing 4.3% in July.

• British inflation hit a more than nine-year high last month after the biggest monthly jump in the annual rate in at least 24 years, largely due to a one-off boost reflecting the "Eat Out to Help Out" scheme that pushed down restaurant meal prices last year. Restaurant prices represented more than half of the 1.2 percentage point rise in headline inflation last month. Consumer prices rose by 3.2% in annual terms last month after a 2.0% rise in July, the highest rate since March 2012, the Office for National Statistics said. The 1.2 percentage point rise in the annual rate of inflation in the space of a month marked the sharpest such increase since detailed records started in 1997.

North Korea fired a pair of ballistic missiles off its east coast on Wednesday, South Korea's military said, ratcheting up regional tensions just days after testing a cruise missile with possible nuclear capabilities. The launches came amid a flurry of activity on the peninsula, including high-level diplomatic talks and South Korea's testing a newly developed submarine-launched ballistic missile of its own.

British Prime Minister Boris Johnson reshuffled his team of ministers on Wednesday, seeking to refocus his government on fulfilling their 2019 election pledges as the country emerges from the COVID-19 pandemic. The highest profile changes were to Foreign and Education Secretary positions.

• England set out measures to boost international travel on Friday, abandoning expensive COVID-19 testing requirements for fully vaccinated travellers, scrapping its traffic light system, and adding eight countries to its safe list. Travellers returning to England from Turkey, Pakistan, and the Maldives will not have to quarantine on their return, as they are removed from the so-called COVID red list for travel, British transport minister Grant Shapps said. Shapps also said, under the new proposals destinations will simply be ranked low or high risk, instead of red, amber and green.

A new defence partnership, AUKUS, between Australia, the United States and Britain to share nuclear-powered submarines is significant, not only for increasing Australia's deterrence capabilities, but also focussing Britain on the region, Prime Minister Scott Morrison said on Friday. Australia finds itself as the common link in a new mesh of global alliances centred on the Indo-Pacific that are all but in name aimed at countering China's rising military power and economic clout. Canberra's 70-year-old defence alliance with Washington already commits Australia to act in response to an attack on U.S. forces in the Pacific, analysts said.

About 70% of Britons say buying online and on mobile phones have become their preferred shopping methods, up from less than half prior to the Coronavirus pandemic, according to a study by personal finance start-up Credit Karma. The study, which has not been previously reported, surveyed 1,034 adults in the UK in July to gauge how digital spending and banking habits have changed since COVID-19 restrictions began.

• Over the week, the main Global Stockmarkets were mostly down, except India and Japan indices. All the D-PIMS Portfolios were slightly down. They were helped by their allocations to Japan and Technology equities.

 

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The comments made above represent our interpretation of events and market views and are in no way a guarantee of future investment performance.
 

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