The selloff was primarily driven by the extreme positioning in the two hot trades – AI (Nvidia) and the Yen carry-trade – complemented by a dose of doom-laden fears about the health of the US economy.  The initial knee-jerk reaction cooled down as the month continued, with equity markets ending the month testing all-time highs (FTSE 100 and S&P 500) and Cable holding $1.30. 

All eyes have been on Central Banks, and the ECB kick started the back to school term with a cut in early September leaving the rate at 3.5%. In the US, lighter non-farm payrolls highlighted a steeper slowdown in the labour market than anticipated (142k versus 165k, with a revision for July’s figures too). At the moment, the economic data is moving so quickly that the markets are unsure as to whether we’ll be seeing a soft landing or not. The Bank of England are next with their meeting, and expectations are for a hold, whilst we await Sir Keir Starmer and Rachel Reeves’s ‘doom-laden budget’. 

The UK market’s assets are still been cherry picked off, with bids for Rightmove from Rupert Murdoch’s Australian listed REA Group (Rightmove shares jumped almost 30% on the rumours before the official bid.) The Egyptian focused gold miner, Centamin, was also bidded for by South African listed miner, Anglogold Ashanti.  

Meanwhile, one company that hasn’t been bid for is UK fashion house, Burberry, who have fallen 75% year to date; leaving it with a market cap of slightly over £2bn (it was £10bn eighteen months ago). On the back of this, the UK stalwart, whose trench coats once accounted for 20% of all UK exports, has dropped out of the FTSE 100. All eyes will be on London Fashion Week as Creative Designer Daniel Lee, attempts to arrest the malaise with his Spring Summer 2025 show at The National Theatre. 
 

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