Market Summary Week Ending 02/10/2022

Following the mini budget announced last week by the government and the subsequent measures introduced by the Bank of England, such as the purchasing of long-dated UK government bonds to restore orderly market conditions, there has been significant stress in the financial system.

British 30-year bond yields hit their highest since 2002 earlier on Wednesday (28^th September), leading traders to say it was becoming increasingly hard to buy and sell bonds due to their perceived volatility.

Sterling’s struggles against the US Dollar continued, hitting an all-time low of £1: $1.0327 on Monday. But it rallied over the close of the week as traders speculated that the UK government will alter their fiscal policies, with over 1% recovery seen on Friday to £1: $1.1234.

Despite the stress and significant volatility, the FTSE 100 closed the final day of a manic week for markets marginally in positive territory, adding around 12 points and finishing up 0.18% for the trading day at 6,894. US based stocks closed out a tumultuous September and trading quarter (Q3) with the Dow Jones down 8.80%, while the S&P 500 and The Nasdaq fell 9.30% and 10.50% respectively all over the course of the month.