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D-PIMS Weekly Market Update - Week of 15th to 21st August 2022

Today’s Monday update:

Over the course of last week, market moving headlines were mostly related to economic geopolitical matters:

• On Monday, Britain has become the first country to approve a COVID-19 vaccine that targets both the original and Omicron variant of the virus. The UK medicines regulator (MHRA) approved the so-called bivalent vaccine made by U.S. drug company Moderna as a booster for adults. "The first generation of COVID-19 vaccines being used in the UK continue to provide important protection against the disease and save lives," MHRA Chief Executive June Raine said in a statement. "What this bivalent vaccine gives us is a sharpened tool in our armoury to help protect us against this disease as the virus continues to evolve."

• On Tuesday, explosions shook an ammunition depot in Russian-annexed Crimea on Tuesday, the latest such incident in a region used by Moscow as a staging post for its war in Ukraine. The Russian Defence Ministry said there were no serious casualties from the blasts in the northern Crimean village of Mayskoye, state-owned news agency RIA reported. The agency also reported a fire at a transformer substation 20 km away. Ukraine has not officially confirmed or denied responsibility for explosions in Crimea, though its officials have openly cheered incidents in territory.

President Joe Biden signed the landmark Inflation Reduction Act into law, calling it one of the "most significant laws in our history." The legislation pours billions of dollars into fighting climate change and enhancing healthcare as it takes steps to mitigate rising prices in the United States. After months of difficult negotiations in Congress that at one point nearly derailed his economic agenda, Biden spoke about the merits of the Inflation Reduction Act and put his signature on perhaps the greatest single legislative victory of his presidency saying, "it's about delivering progress and prosperity to American families."

• Official figures showed on Wednesday, that British consumer price inflation jumped to 10.1% in July, its highest since February 1982, up from an annual rate of 9.4% in June, intensifying the squeeze on households. The increase was above all economists' forecasts in a Reuters poll for inflation to rise to 9.8% in July and will do nothing to ease the Bank of England's concerns that price pressures may become entrenched.

• On Thursday, the United States and Taiwan agreed to start trade talks under a new initiative to reach agreements with "economically meaningful outcomes", with a Taiwan official saying China's "economic coercion" would also be discussed. The office of the U.S. Trade Representative said the two sides had "reached consensus on the negotiating mandate" and it was expected that the first round of talks would take place early this autumn. China’s foreign ministry spokesperson, Wang Wenbin told reporters in Beijing that China opposed any country signing official trade deals with Taiwan, and he called on the United States to stop its engagement with the island.

• Over the week, the main global stock markets were mixed with more down than up. Japan fared the best and domestic UK the worst. Over the week, apart from the D-PIMS Lower to Medium risk portfolio they all had positive week, especially the higher risk portfolios. Falling bond values dragged on the lower risk portfolios. The Portfolios were helped by their Natural Resources and all US holdings.



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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.