Be careful counting your chickens

Hopes are high for the OPEC meeting on 30 November. A programme of cuts to supply that was initiated last year by OPEC and some non-OPEC members (we’ll refer to the two collectively as ‘OPEC/NOPEC’) has resulted in the oil price steadily rising from its lows to just short of $60 a barrel at the … Continue reading “Be careful counting your chickens”

Germany shows there is still political risk in the Eurozone

When the Netherlands kept Mr Wilders out of power and Mr Macron swept into office in France, the immediate threats to the Euro disappeared. The recent collapse of coalition talks in Germany does not presage any undermining of majority support for the single currency in its heartland. The next major political issue facing the Euro … Continue reading “Germany shows there is still political risk in the Eurozone”

World pension ages on the rise: when will you retire?

State pension ages are rising around the world. Most countries will increase the point at which people can withdraw payments to 67 in coming decades. Some governments have been more aggressive. The UK and Ireland will increase the age to 68, and the British government has indicated that more even higher ages are inevitable. The … Continue reading “World pension ages on the rise: when will you retire?”

Budget November 2017: Third time lucky?

If the Chancellor suffers from claustrophobia, he’ll have been having a hard time of it in recent weeks. Mr Hammond has been hemmed in on one side by sobering economic and fiscal forecasts; on another by public services and national infrastructure showing the strain after seven years of austerity; and on a third by members … Continue reading “Budget November 2017: Third time lucky?”

Liabilities and the long-term effects of low rates

We lived through history earlier this month. The Bank of England (BoE) raised interest rates for the first time in ten years. But interest rates will stay low for a lot longer yet and this should encourage those with a long-term view. The move was symbolically important – a small, but significant, reminder that interest … Continue reading “Liabilities and the long-term effects of low rates”

Budget 2017 predictions

Chancellor Phillip Hammond will present his Autumn Budget to Parliament on Wednesday 22 November. The statement has been widely tipped to contain some concessions to younger voters but this will do little to relieve the pressure on maintaining fiscal targets. The Conservative Party conference in October outlined a number of policies aimed at courting younger … Continue reading “Budget 2017 predictions”

Is this the end of the global cycle?

Markets often have setbacks. There is always plenty to worry about. Recent price falls have not related to any one event or new fact that has emerged. Some people want to take some profits. Some people have become more nervous about how sustainable the recovery might be. Some worry that the Central Banks led by … Continue reading “Is this the end of the global cycle?”

Trump – one year on

A year on from Donald Trump’s election as US president, political and economic pundits are grappling with a big question: what is the significance of Trump? Is his presidency a boorish blip or a symptom of deeper malaise? Before Trump’s election, markets were fearful about the ‘bad things’ that he promised – American isolationism and … Continue reading “Trump – one year on”

Will China’s stronger-than-expected growth last?

At the closing ceremony of the Chinese Communist Party’s 19th five-year National Congress, President Xi Jinping’s banner term “Thought on Socialism with Chinese Characteristics for a New Era” was written into its constitution, taking its place among the formal ideologies of his predecessors. Meanwhile, there are suggestions that he may remain in power past the … Continue reading “Will China’s stronger-than-expected growth last?”

Asian reforms and growth

The Asian economies are growing well, with their stock markets responding favourably to higher company earnings and dividends. Japan in particular has put in a strong performance in recent weeks in the wake of Mr Abe’s victory in an early election. Foreign investors have been keen to back the renewed government as it continues with … Continue reading “Asian reforms and growth”

You didn’t think European political risk was over, did you?

The crisis in Catalonia probably won’t derail the Eurozone recovery. But there are more political challenges ahead. Markets have largely shrugged off events in Catalonia. They are probably correct to do so. After all, Catalonia is unlikely to become independent, at least for the foreseeable future. There does not appear to be a majority in … Continue reading “You didn’t think European political risk was over, did you?”

Jay Powell nominated as next Fed Chair

President Trump has nominated Jay Powell as the next Chair of the US Federal Reserve. This was largely expected, despite Trump’s hosting of a somewhat convoluted selection process (involving a promotional video), which saw numerous candidates briefly take the role of favourite. The official changing of the guard occurs at the start of February next … Continue reading “Jay Powell nominated as next Fed Chair”

Tax avoidance and evasion

The recent publication of the Paradise papers has reminded us of the gulf between the politicians and tax authorities on the one hand, and some savers and their advisers on the other. It is common now in political discourse to condemn both tax evasion and tax avoidance in the same sentence as if they are … Continue reading “Tax avoidance and evasion”

Eurozone: Political risk still simmering

The major political obstacles, which had held back European risk assets, have now been overcome. However, events in Austria, Spain and Italy highlight the ongoing trend towards populist, nationalist and now regionalist sentiment. In Austria, although the far right Freedom Party (FPÖ) was recently defeated in elections for the legislative parliament, it could enter government … Continue reading “Eurozone: Political risk still simmering”

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”