UK interest rates rise for the first time in a decade

The Bank of England (BoE) raised UK interest rates for the first time since July 2007. The base rate has increased from 0.25% to 0.5%, but we do not believe this necessarily marks the start of an imminent tightening cycle… Although today’s is first interest rate hike in over a decade, the forward guidance provided … Continue reading “UK interest rates rise for the first time in a decade”

The politics of identity stalk European markets

Earlier this year investors worried that the euro was under threat. Its very future in the Netherlands and in France was on the ballot paper. As many of us expected, the euro survived its brush with democracy. In the Netherlands the anti-euro party topped the poll, but well short of the seats needed to govern … Continue reading “The politics of identity stalk European markets”

Xi who must be obeyed

Xi Jinping has become the most powerful Chinese leader since Mao Zedong. Time will tell whether this is a good or bad thing for the economy. Chinese leaders gathered last week for the 19th Party Congress, a five-yearly plenum that sees the leadership of the Communist Party reshuffled, and economic and policy priorities outlined. Three … Continue reading “Xi who must be obeyed”

What stockmarket valuations tell us about equities’ next move

The world is, seemingly, in a bull market in everything. Just take a few headlines from this month alone: US stocks, already at all-time highs, hit a sixth consecutive closing high, which is the first time that has happened for 20 years. In debt markets, Ireland issued a bond with a negative yield, which means … Continue reading “What stockmarket valuations tell us about equities’ next move”

Japanese elections: Shinzo shines

The gamble has paid off for Japan’s prime minister Shinzo Abe, with his ruling coalition maintaining its two-third “super majority” in the snap lower house elections. It was a thumping victory for Mr Abe, and one that will surely see him be re-elected for a third term in his party’s presidential election in September 2018. … Continue reading “Japanese elections: Shinzo shines”

China’s different system carries on growing

When President Xi first gained the position of President of China five years ago there was considerable western enthusiasm. He came across as a keen reformer willing to push on with China’s enterprise revolution. He wanted to open China’s markets more to the west, to liberalise foreign exchange, privatise more industry and even introduce more … Continue reading “China’s different system carries on growing”

Ethical Investing: Myth vs. Reality

Ethical investing has been around for a long time, with the first recorded instance dating back to the 18th Century.  But despite its longevity, many investors are unaware that it is an option for them, and there are a number of common misconceptions.  In this short article, we provide the facts so you can make … Continue reading “Ethical Investing: Myth vs. Reality”

Two decades on from crisis, Asia is roaring

Twenty years ago this month, the government of Indonesia signed the first of several agreements with the International Monetary Fund (IMF) that threw a financial lifeline to a country struggling to stay afloat amid the Asian crisis. Deep-pocketed speculators, spotting structural weaknesses in selected regional economies, had forced catastrophic currency devaluations which triggered economic and … Continue reading “Two decades on from crisis, Asia is roaring”

Can Japan stay on course?

As the Japanese market hits a new 20 year high, what impact will the upcoming snap election have? The Japanese economy is growing well this year, and corporate earnings are coming in with good gains. The yen has been weak for a long time, Japanese multinationals are competitive, and the Central Bank remains very accommodative. … Continue reading “Can Japan stay on course?”

Will it be smooth sailing for markets until the end of the year?

Schroders Keith Wade & Aymeric Forest look at whether equities can sustain their stellar run in view of the coming reduction in central bank liquidity, geopolitical tensions, currency moves and stretched valuations? Equities underpinned by solid synchronised global growth The global economy is on a firm and synchronised upward trajectory, which is increasingly industrial-led and underpinned … Continue reading “Will it be smooth sailing for markets until the end of the year?”

Should the Bank of England raise rates?

The Governor has warned us that a rate rise could happen soon. Markets have duly priced in an increase. The pound rallied strongly against the dollar, partly on that interest rate expectation. UK ten year rates and other longer term bond yields have adjusted upwards. The problem is that the economy is slowing. Treasury policy … Continue reading “Should the Bank of England raise rates?”

Japan’s election uncertainty

Call a snap election.  What could possibly go wrong?  Well, as embattled UK Prime Minister Theresa May could tell us (in between coughing fits) — plenty.  And yet Shinzo Abe, Japan’s premier, is set to go down the same path. Will he regret his decision to summon the country to the polls in October? At … Continue reading “Japan’s election uncertainty”

Nobody puts sterling in the corner

The story for September remains mundanely similar as for much of the year. Global political noise is barely being acknowledged by capital markets; central banks attempt to signal the way higher for rates without spooking the market; the global economy continues to bump along. Despite an increasingly aggressive stance from North Korea, a destructive hurricane … Continue reading “Nobody puts sterling in the corner”

When economic pessimism means more hikes, not fewer

There has been a striking shift in recent Bank of England (BoE) communication. In the minutes of its September meeting, policy makers noted that “some withdrawal of monetary stimulus is likely to be appropriate over the coming months.” This message was then reiterated in speeches by noted ‘dove’ Gertjan Vlieghe and Bank Governor Mark Carney. … Continue reading “When economic pessimism means more hikes, not fewer”

Spain’s troubles will not derail Eurozone growth

Political risk stalks the Eurozone. The imposition of budget rules from the centre makes domestic politics in many of the zone’s countries difficult. Many of the countries have proportional systems which make majority governments a bit less likely anyway. The unpopularity of austerity policies to comply with Eurozone budget rules has aided in many countries … Continue reading “Spain’s troubles will not derail Eurozone growth”