Why the world economy is like a wobbly bike

The world economy increasingly resembles an unstable bicycle that can be tipped over by the slightest bump in the road. Three months ago we said “the easing in US-China trade tensions, more flexible central banks and the benefits of lower oil prices should stabilise activity later this year and support an upgrade in our global … Continue reading “Why the world economy is like a wobbly bike”

Whatever it takes…to raise inflation

The European Central Bank has consistently failed to meet its inflation target in the seven years since the region’s sovereign debt crisis. Nor has the market any faith that it might do so in future. With the European Union (EU) elections out of the way, the horse-trading over a host of top EU jobs will … Continue reading “Whatever it takes…to raise inflation”

Something has changed in the Trump administration

Donald Trump has put power back into his tweets. His recent announcements on technology exports and trade have sent markets lower. The tweets are backed by Executive Orders and by follow-up action from the relevant departments of government. It reminds us that something has changed in the Trump administration. The President has found a team … Continue reading “Something has changed in the Trump administration”

Who will pay as US-China trade wars intensify?

The latest developments suggest that trade tensions between the US and China will be more protracted than previously expected. The US recently announced it is raising tariffs on $200 billion of imports from China to 25% from 10%, and China has responded by increasing tariffs on $60 billion of imports from the US. The US … Continue reading “Who will pay as US-China trade wars intensify?”

Still on our way in May, watching for winners

Investing is a curious mixture of art and science. It is a world of phenomenally fast algorithmic trading, supplemented with old-fashioned sayings and adages concocted decades ago. Behavioural finance studies draw attention to the importance of ‘heuristics’. These are mental shortcuts or rules of thumb that ease the cognitive load in decision-making. The saying “sell … Continue reading “Still on our way in May, watching for winners”

The Middle East stirs some old worries

America is intensifying its policy against Iran in the Gulf, and challenging more EU policy over Iran and energy as well as trade. Donald Trump has spent the last week moving markets. His decision to push back hard on China before agreeing a trade deal led to sharp sell offs in the Shanghai market and … Continue reading “The Middle East stirs some old worries”

Is China’s Belt and Road Initiative a threat to the West?

China’s “New Silk Road” aims to improve trade between Asia and Europe, but the growing influence of Beijing and its tactics around debt have got hawks in Washington worried. They argue that China is using its wealth to buy influence across the world – and are preparing for a decades-long fight for economic supremacy and … Continue reading “Is China’s Belt and Road Initiative a threat to the West?”

Is the UK stuck in Brexit limbo?

The UK has been granted its second extension to the Article 50 deadline, averting a no-deal Brexit that would have happened on 12 April. The UK now has until 31 October to ratify the current Withdrawal Agreement, although there was some disagreement amongst other EU members as to how much longer the UK should be … Continue reading “Is the UK stuck in Brexit limbo?”

Germany will pay the price for Italy’s provocation of Trump

The Italians have joined China’s controversial “New Silk Road” programme, a move that is likely to stoke the ire of Washington. At the weekend, Italian populists handed Donald Trump yet another reason to turn his trade guns on Europe, increasing the risk of a German recession. At a signing ceremony in Rome, Chinese President Xi … Continue reading “Germany will pay the price for Italy’s provocation of Trump”

Panning for gold in murky waters

In 2018, international investors pulled out more than €50 billion from European equities in response to weakening Eurozone economic data, uncertainty over Brexit and concerns about Italian banks. Today, investors’ positioning in Europe is as underweight as it has been since the Eurozone crisis. It is understandable that investors are wary of a potential economic … Continue reading “Panning for gold in murky waters”

Inescapable investment truths for the decade ahead

It seems clear to us that the world investors have got used to over the last few years is very different to the one we need to get accustomed to in the years to come. We have identified a number of economic forces and disruptive forces we think will shape the investment landscape ahead of … Continue reading “Inescapable investment truths for the decade ahead”

Does the Trump-Kim summit matter for investors?

If North Korea gives up its nuclear arsenal, Donald Trump has promised that the country will have an “awesome” economic future with a wealth of opportunities on offer. The US president is not alone in seeing vast potential in the reclusive Asian nation. Billionaire Jim Rogers, one of the world’s most successful investors, famously said … Continue reading “Does the Trump-Kim summit matter for investors?”

The Brexit deadline looms

The UK ended February with the question of Brexit still unanswered.  The month was dominated by political newsflow as concerns over Brexit were compounded by the resignation of eleven MPs who left the Conservative or Labour parties to form ‘The Independent Group’.  A second ‘meaningful vote’ on Prime Minister Theresa May’s Brexit deal will take … Continue reading “The Brexit deadline looms”

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”