Central banks continue to prop-up markets

The tsunami of money has been unprecedented and is the main reason equity markets have performed as they have. The stimulus measures have been at their largest in the US, where money growth has shot up to 25% for the year. In the Eurozone and the UK, it is a lively but more modest 10%. … Continue reading “Central banks continue to prop-up markets”

Where to next for the Eurozone

Will the Coronavirus battle trigger a Eurozone war? The economic and health impacts of coronavirus have not been distributed equally across the Eurozone. In particular, peripheral countries such as Italy have been hit hardest in human and economic terms. This has reopened old fault lines between member states about a shared fiscal policy to offset … Continue reading “Where to next for the Eurozone”

The US-EU economic battle

Donald Trump spoke out at Davos, condemning the people he called the “perennial prophets of doom” for forecasting climate and other disasters. He said they “are the heirs of yesterday’s foolish fortune tellers. They want us to do badly”. He did not name the EU or individual European countries, but the implication was clear. His … Continue reading “The US-EU economic battle”

Looking back at the markets through December

A selection of articles looking back through the markets last month. Global Market Review Double-digit gains in 2019 Despite a year that was filled with political and social upheaval – from the trade war between the US and China, through Brexit, to the civil unrest in Hong Kong – many world markets achieved double-digit gains … Continue reading “Looking back at the markets through December”

The biggest victim of US tariffs in 2020 could be the EU

The tariff battle between Washington and Beijing is far from over, but the biggest battle for US trade hawks over the next 12 months is likely to be with Europe. The global trade slowdown has already hit the European economy hard. Brussels has been forced to cut its growth forecasts for the eurozone to its … Continue reading “The biggest victim of US tariffs in 2020 could be the EU”

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”

Trump’s bid to take on the EU could crush the German economy

The EU’s Trade Commissioner held out an olive branch to Donald Trump last week as the bloc tries to prevent tariffs being put on the auto sector – but the move looks likely to fail. An escalating trade dispute between Brussels and Washington now appears inevitable – and Germany will feel most of the pain … Continue reading “Trump’s bid to take on the EU could crush the German economy”

Pressures on the EU as elections loom

We are in the long run up to the European Parliamentary elections. This will be followed by the appointment of a new European Commission. It means there will be an argument over the future direction of EU and euro policy, with a wide range of views from those who with En Marche in France want … Continue reading “Pressures on the EU as elections loom”

Will the world authorities do enough to stimulate their economies?

Markets signalled the slowdown now underway in industrial output and investment with a sharp sell-off at the end of last year. They challenged the Federal Reserve in particular to ease its tough stance, which it duly did as 2019 dawned. US policy is to spend more and tax less, offering some budget boost to the … Continue reading “Will the world authorities do enough to stimulate their economies?”

EU caught up in internal war of words

The President of the EU Commission had some choice words to say about the Italian budget dispute. Jean-Claude Juncker argues that Italy has to keep to strict budget limits on spending and borrowing that has been laid down by the EU. He went so far as to suggest it would mean the end of the … Continue reading “EU caught up in internal war of words”

Why is this such a worried bull market?

Normally bull markets are full of people who are optimistic. They radiate enthusiasm for economies and shares. They hunt down markets or individual stocks that look cheap compared to the rest and recommend them. They recommend simply buying the global or local market to join in a general uplift in shares they expect. Eventually you … Continue reading “Why is this such a worried bull market?”

Can European politics damage the euro?

It is often fashionable to worry about European politics as newer parties of the right, left and centre emerge to challenge the economic orthodoxy of the Eurozone. We saw this at its most spectacular in Greece, where Syriza swept aside the old parties and gained a majority in a proportional system designed to make that … Continue reading “Can European politics damage the euro?”

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”