A steady week for markets as easing price pressures boost confidence.
This week @ 3:34pm – Friday 20th February – London.
Markets:
- FTSE 100 rose 2.46% to 10,703, supported by easing UK inflation data that strengthened expectations for Bank of England rate cuts, which in turn lifted rate‑sensitive stocks.
- S&P 500 rose 0.38% to 6,862, helped by resilient US macro data including improving sentiment indicators released during the week.
- Nasdaq Composite rose 0.82% to 22,730, driven by continued strength in US technology and supportive forward‑looking PMI readings.
- STOXX Europe 50 rose 1.85% to 5,242, reflecting stable Eurozone growth expectations and subdued inflation that supported equity markets.
Bonds:
- UK 10‑year gilt yields fell 6.6 bps to 4.35%, reflecting softer UK CPI and rising expectations of BoE policy easing.
- US 10‑year Treasury yields rose 1.7 bps to 4.07%, as markets absorbed a heavy US data calendar.
Commodities:
- Brent crude rose 5.49% to 71.47 USD/bbl, supported by tightening inventory data and supply‑side adjustments in weekly EIA readings.
- Gold rose 0.58% to 5,075.70 USD/oz, as investors responded to geopolitical developments and modest shifts in policy expectations.
- Copper fell 0.68% to 5.7635 USD/lb, reflecting slower industrial demand signals.
FX:
- GBP/USD fell 1.37% to 1.34685, weighed down by weaker UK GDP signals and expectations for BoE cuts.
- GBP/EUR fell 0.51% to 1.14465, as the Euro held firmer ahead of Eurozone data releases and stable growth expectations.
Macro:
- UK CPI (January) slowed to 3.0% y/y (from 3.4%), an important input for the BoE as it raises the likelihood of spring rate cuts, easing financial conditions.
- US February flash PMIs showing continued expansion across both manufacturing and services, helping to anchor expectations for a cautious but steady Federal Reserve stance.
- US Philadelphia Fed Manufacturing Survey, rose to 16.3 (from 12.6), pointing to firmer regional activity and improved new orders.
- Eurozone: Growth expectations remain modest but stable, with 2026 GDP projected around 1.1%. This matters for assessing demand conditions for European corporates and trade dynamics.
Companies:
- Rio Tinto reported strong full‑year results with an 8% increase in copper‑equivalent production, contributing to a 9% rise in underlying EBITDA to $25.4bn. The company maintained its 60% dividend payout and reiterated visibility on 3% annualised Copper production growth to 2030, supported by disciplined cost control.
- AGCO reaffirmed its ambition to reach 14%–15% operating margins, supported by continued investment in precision agriculture and autonomy. The company highlighted new autonomous farming technologies and introduced the Fendt e100 Vario electric tractor, demonstrating progress in low‑emission smart machinery.
What we will be keeping an eye on next week…
w/c 23rd February
- UK: Employment data and inflation expectations
- US: Durable goods orders and consumer confidence
- Eurozone: PMI and sentiment indicators
(All of which will influence expectations for central bank policy across regions.)
Markets move constantly and the numbers in this update will change. This is a snapshot only, pulled together from a range of sources, and is meant as a quick guide rather than a precise record. It’s not investment advice and shouldn’t be used to make trading or investment decisions. If you need more accurate or specific data over a defined period, please get in touch with a member of the team who will be happy to help.
Important Information
This article is for information only and does not constitute advice or recommendation and you should not make any investment decisions based on it. The views and opinions of this article are those of Casterbridge at the time of writing and may change without notice. Any opinions should not be viewed as indicating any guarantee of return from investments managed by Casterbridge nor as advice of any nature. It is important to remember that past performance and the value of an investment, and any income from it, may go down as well as up and the investor may not get back the original amount invested.