Market sentiment has turned positive following US central bank chair Powell signalling a slower pace of tightening in the coming months as monetary policy continues to ‘normalise’. A 0.50% hike is expected this month with a forecasted peak of 5% mid-2023, before potential rate cuts later next year.

In the UK, rhetoric from the Bank of England remains hawkish with a further 0.50% rate increase fully priced in for this month, and further hikes expected in the coming months to reach a peak of 4.50%. The UK housing market continues to show signs of cooling with prices dropping 1.4% last month and a significant drop in mortgage approvals as higher rates and the cost-of-living continue to dampen demand.

The European Central Bank are also set to raise rates by at least 0.50% in December as they remain fully focussed on stubbornly high inflation at the risk of a deeper recession.

Events in China continue to be a major focus, but markets remain optimistic that further covid reopening into next year can help underpin global growth.