Italy’s 66th government since WW2 looks set to fall

Trade continues to dominate the headlines with Donald Trump’s tweets around US tariffs driving sentiment. The emergence of China’s appetite to use its currency as a shock absorber also added volatility. August’s volumes are traditionally lighter and that helped catalyse a very weak start for US equities albeit a lot of the losses had been … Continue reading “Italy’s 66th government since WW2 looks set to fall”

Unwise to chase the rally in European equities

Although the eurozone economy is struggling, European assets have performed strongly in recent weeks as policymakers at the European Central Bank (ECB) have made it clear that they are ready to implement another round of monetary stimulus. Nevertheless, we remain pessimistic about the eurozone economy’s prospects and sceptical of the ECB’s ability to stimulate growth. … Continue reading “Unwise to chase the rally in European equities”

ESG: Responsible investing or investing diligently?

The idea of ESG, which stands for Environmental, Social and Governance, is becoming increasingly important within the investment world. Regulators and policy makers are encouraging the integration of ESG considerations in Discretionary Fund Managers’ investment processes, while increasing client demand for responsible investment services means that advisers can no longer afford to ignore the ESG … Continue reading “ESG: Responsible investing or investing diligently?”

Avoiding a corporate bond liquidity squeeze

Since the global financial crisis in 2008, aging developed-world populations, record low deposit interest rates and quantitative easing by the world’s major central banks have driven a global ‘search for yield’ by investors. For many years, this drove asset yields lower across the risk spectrum. However, since the start of 2018 the investment backdrop has … Continue reading “Avoiding a corporate bond liquidity squeeze”

How long will the bull market last? Four areas to watch…

The global economy’s ongoing expansion continues to underpin the current equity bull market, which is already one of the longest-running in history. We do not expect this dynamic to change in the short term, but there are shifts occurring within the economic backdrop which warrant monitoring for signs that the investment environment may be beginning … Continue reading “How long will the bull market last? Four areas to watch…”

One year of Trump

January 20th marked Donald Trump’s one-year anniversary as US President.  So far, his tenure has proved controversial and divisive, both domestically and abroad. His attempts to take credit for the performance of the US economy and equity market should be taken with a pinch of salt, particularly given the considerable momentum carried over from his … Continue reading “One year of Trump”

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?”

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”

Could politics structurally alter the economic backdrop?

With 5 July having marked ten years since the Bank of England (BoE) last raised UK interest rates, we assess the state of the economy and its prospects in light of recent political developments. Although the UK economy has shown resilience since last year’s Brexit referendum, its growth rate decelerated in the first quarter of … Continue reading “Could politics structurally alter the economic backdrop?”

China: policy support offsetting structural headwinds

Despite concerns that China’s economy was undergoing a ‘hard landing’ in January 2016, fiscal, monetary and other government policy stimulus ensured that it was growing slightly faster at the end of the year than it had been at the start. Nevertheless, with the country in the middle of a structural transition from investment towards consumption, … Continue reading “China: policy support offsetting structural headwinds”

Japan: a leveraged play on global growth?

Japan’s nascent economic recovery is showing encouraging signs, with some strength in the labour market and a favourable corporate environment. However, domestic demand remains weak and it appears that cultural headwinds will have to be addressed before a virtuous circle of rising domestic demand and inflation can begin. Meanwhile, Japan’s asset markets are being distorted … Continue reading “Japan: a leveraged play on global growth?”

Theresa May announces UK general election

This morning, UK Prime Minister Theresa May announced the government’s intention to hold a snap general election on 8 June 2017. Parliament will vote to set a date for the election tomorrow, needing a supermajority of two-thirds in favour to pass, although this is expected with the opposition leader Jeremy Corbyn having already welcomed the … Continue reading “Theresa May announces UK general election”

Foreign exchange: a major contributor to portfolio returns

In recent years, subdued global inflation and weak growth have allowed the world’s major central banks to keep monetary policy at extremely accommodative levels. However, this may be changing, as global growth and inflation forecasts have risen amid a shift towards fiscal stimulus in a number of developed economies. With the Federal Reserve (Fed) simultaneously … Continue reading “Foreign exchange: a major contributor to portfolio returns”

Europe: political opportunity amid systemic threats

The eurozone is undergoing an economic recovery, with unemployment falling and the threat of deflation mitigating amid rising global inflationary forces. However, this masks uneven levels of progress being made by the region’s underlying countries. With some of the stronger economies’ business cycles maturing, there remains significant risk that the recovery will stagnate if growth … Continue reading “Europe: political opportunity amid systemic threats”

Europe: political events in Italy prelude to the eurozone’s demise?

Last night, the Italian Government was heavily defeated in a referendum over changes it had proposed to the country’s constitution. This led to the resignation of Prime Minister Matteo Renzi and has thrown significant uncertainty over the country’s political future. Italy’s president has begun the process of selecting a new prime minister to form a … Continue reading “Europe: political events in Italy prelude to the eurozone’s demise?”