UK VOTE: OUT OF EUROPE

The UK’s momentous decision to leave the EU brings long-lasting political and economic consequences. We expect European leaders to focus on fending off domestic populist movements emboldened by the British exit and on preventing the entire EU edifice from falling apart. This points to a tough negotiating stance toward the UK and less focus on … Continue reading “UK VOTE: OUT OF EUROPE”

A lacklustre month – Is political uncertainty to blame?

May was a lacklustre month for equity markets with the FTSE World index rising by just 0.87%. Buoyed by some positive economic figures, the US stock market was the best performing asset class (up 3.7%) followed interestingly by UK gilts which rose by 2.4%, perhaps seen as a safe haven investment in the run up … Continue reading “A lacklustre month – Is political uncertainty to blame?”

Disappointing economic data in China

Emerging equity markets generally performed less well than their developed counterparts during May. In particular, performance was pulled down by a steep decline in share prices in Brazil, as the country’s Senate voted to impeach President Dilma Rousseff. The Bovespa Index fell by 10.1% over May as a whole; nevertheless, over the year to date, … Continue reading “Disappointing economic data in China”

Economic growth gathers pace in the eurozone

During May, Greece finally managed to thrash out a deal with its international creditors that would release a further tranche of bailout cash to allow Greece to meet its upcoming debt repayment obligations. Following the confirmation of the deal, an International Monetary Fund (IMF) spokesperson commented, “Our European partners and all the other stakeholders all … Continue reading “Economic growth gathers pace in the eurozone”

Will US rates rise in June?

The prospect of higher interest rates absorbed a sizeable proportion of investors’ attention in the US during May. The minutes from the Federal Open Market Committee’s (FOMC’s) April meeting fuelled speculation that policymakers might move to tighten interest rates as early as June, as long as economic data – domestic and external – remain supportive. … Continue reading “Will US rates rise in June?”

Prospect of higher US rates drives down Treasury bond yield

As the referendum over the UK’s future membership of the European Union (EU) drew closer, credit ratings agency Fitch warned that, if the UK were to leave the EU, a Brexit would “weigh on the economies of other EU countries and increase political risks”. In particular, a Brexit would cut the UK’s contribution to the … Continue reading “Prospect of higher US rates drives down Treasury bond yield”

Weak sterling undermined UK dividends in Q1

Speculation over the EU referendum continued to absorb the limelight during May, and investors and companies became increasingly nervous about the potential impact of a Brexit. The FTSE 100 Index fell by 0.2%, while the FTSE Small Cap Index climbed by 0.2%; meanwhile, the FTSE 250 Index posted a monthly gain of 2.3%. The relatively … Continue reading “Weak sterling undermined UK dividends in Q1”

May is dominated by Brexit debate

In the UK, May was dominated by discussion over the impending referendum on the UK’s membership of the European Union (EU), which is scheduled to take place on 23 June . During the month, the tenor of the debate became progressively irritable, as theorising and argument over the economic impact of a Brexit became increasingly … Continue reading “May is dominated by Brexit debate”

Gilt yields fall in May

As the debate surrounding the UK’s future membership of the European Union (EU) intensified, gilt prices rose during May and yields fell. The yield on the benchmark ten-year UK gilt ended May at 1.56% , compared with 1.73% at the end of April. Meanwhile, the shorter-dated UK gilt yield fell over the month from 0.52% … Continue reading “Gilt yields fall in May”

Better-than-expected economic growth in Japan

Having contracted by 0.4% during the final quarter of 2015, Japan’s economy expanded more strongly than expected during the first the months of 2016, posting quarterly growth of 0.4% and annualised growth of 1.7%. Despite weakness in export activity and public investment, economic growth received an overall boost from an increase in government spending. The … Continue reading “Better-than-expected economic growth in Japan”

Brexit debate and US monetary policy dominates in May

As June’s referendum on the UK’s future membership of the European Union (EU) drew closer, the tone of the Brexit debate became increasingly ill-tempered in May. During the month, various influential organisations – including the Bank of England (BoE), the International Monetary Fund (IMF) and the Confederation of British Industry (CBI) – contributed to the … Continue reading “Brexit debate and US monetary policy dominates in May”