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D-PIMS Weekly Market Update - Week of 6th to 12th June 2022

Today’s Monday update:

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

• On Monday, Russia struck Kyiv with missiles for the first time in more than a month, while President Vladimir Putin warned he would hit new targets in Ukraine if western nations supplied the country with longer-range missiles. In Sievierodonetsk, the main battlefield in the east where Russia has concentrated its forces, Ukrainian forces are holding their ground after having retaken half of the city, said Serhiy Gaidai, governor of Luhansk province where the city is located.

President Joe Biden declared a 24-month tariff exemption on Monday, for solar panels from four Southeast Asian nations after an investigation froze imports and stalled projects in the United States, sources familiar with the matter told Reuters. The move comes amid concern about the impact of the Commerce Department's months-long investigation into whether imports of solar panels from Cambodia, Malaysia, Thailand and Vietnam are circumventing tariffs on goods made in China. Biden also will invoke the Defense Production Act to drive U.S. manufacturing of solar panels and other clean energy technologies in the future, with the support of loans and grants, the sources said.

• On Tuesday, Russia said that two major Ukrainian ports on the Sea of Azov seized by Russian forces were ready to resume grain shipments, but the Kremlin said Kyiv still needed to demine the approaches to its ports for exports to take place. The Sea of Azov is shallower than the Black Sea and its ports are only accessible to smaller vessels. Ukraine's main port of Odesa remains blocked. More than 20 million tonnes of grain are stuck in Ukraine awaiting shipment, and Ukrainian President Volodymyr Zelenskiy said this could rise to 75 million by the autumn.

British Prime Minister Boris Johnson looked to shore up his position on Tuesday, by setting out a raft of new policies to senior ministers after he survived a confidence vote that revealed the scale of the threat to his position. Johnson won the vote late on Monday by 211 votes to 148 - enough to avoid having to immediately resign, but a larger than anticipated rebellion within his party that leaves him politically wounded and battling to win back the confidence of his colleagues and the general public.

• On Wednesday, Ukrainian forces were successfully holding out against the assault in Sievierodonetsk, the general staff said, while Russian troops were bringing in new resources towards Donbas in an intense battle for control of the eastern region. The days-long battle for the industrial city has emerged as pivotal, with Russia focusing its offensive might in the hope of achieving one of its stated aims - to fully capture surrounding Luhansk province on behalf of Russian-speaking separatists.

Turkey's foreign minister said on Wednesday a United Nations plan to ease a global food crisis by restarting Ukrainian grain exports along a sea corridor was "reasonable", and requires more talks with Moscow and Kyiv to ensure ships' safety.

• On Thursday Prime Minister Boris Johnson told Britons he was "on your side", vowing to build a high-growth, low-tax economy where everyone could buy their own home, in his latest attempt at a reset after surviving a major revolt against his leadership. In a wide-ranging speech, the Conservative leader vowed to tackle the soaring cost of living and address long-standing problems such as unaffordable childcare. Johnson warned the British public there was no quick fix to the economic instability stoked by Russia's invasion of Ukraine, but that his government would use "fiscal firepower" to help ease the cost-of-living crisis.

• The Bank of England said on Friday it was satisfied that Britain's top banks could be shut down without putting at risk the stability of the financial system or disrupting customers, but it found shortcomings at three major lenders. In its first public assessment of how failing lenders could be dismantled in a crisis without taxpayer handouts, the BoE said it had also identified "areas or further enhancement" for six firms. The three banks found to have shortcomings were Lloyds, Standard Chartered and HSBC. All three banks said in separate statements on Friday they were improving their so-called resolution plans.

U.S. consumer prices accelerated in May as petrol prices hit a record high and the cost of food soared, leading to the largest annual increase in over 40 years, suggesting that the Federal Reserve could continue with its 50 basis points interest rate hikes through September to combat inflation. CPI increased 8.6%. That was the largest year-on-year increase since December 1981 and followed an 8.3% advance in April. Economists had hoped that the annual CPI rate peaked in April.

• Over the week, the main global stock markets were mainly down, apart the Far East. Ongoing inflation and growth concerns were still weighing on markets. Over the week, all the D-PIMS Portfolios were down. The Portfolios were helped by their China and some Absolute Return allocations.


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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.