Weekly Market Update - 6 November 2023

Deal or No Deal?

Australia has walked away for the second time in three months from talks with the European Union toward a free trade deal. The two sides have been working on a free trade agreement for more than five years and while there was broad consensus across most areas, a few remaining agricultural issues were threatening to derail the entire compact. Australia was pushing for greater access to the European market for its beef, mutton and sugar, while Brussels wants an end to the use of certain geographic locators on products such as Prosecco and feta.

Source: Bloomberg

Record Wage Hikes

Workers in the US are getting record-breaking wage hikes this year thanks to strategic strikes and stunning contract wins. The result is a boost in middle-income wages and a shift in the balance of power between companies and their employees. Even before the United Auto Workers reached historic contract deals with carmakers, unions across the country had already won their members 6.6% raises on average in 2023 — the biggest bump in more than three decades, according to an analysis by Bloomberg Law.

Source: Bloomberg

BOE Holds

Bank of England Governor Andrew Bailey may insist that it is “much too early to be thinking about rate cuts,” but the financial markets have other ideas. After the UK central bank pressed pause on the quickest monetary tightening in three decades, traders now expect as many as three quarter-point cuts from the BOE by end of 2024, which would reduce the benchmark rate to 4.5%. The betting by investors marks a sharp contrast with the message Bailey repeated in interviews and a press conference.

Source: Bloomberg