UK Elections - june 8th 2017Christopher Peel - Chief Investment Officer
It would be premature to assume that these results will be replicated at the general election, but it is very clear that the Prime Minister is in a commanding position. The most recent opinion polls indicate that the Tories are 16 points ahead of Labour and are set to increase their majority in the House of Commons from 17 MPs to more than 100 MPs. A result along these lines will hopefully silence the fringe players in UK politics such as Nicola Sturgeon and give the government a stronger mandate in the challenging talks with Brussels.
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The US dollar index, which represents the value of the dollar against a basket of developed market peers, fell through key technical support to its lowest level in 2 years.
There are growing signs that the US dollar may finally roll over.
Despite suffering the worst pandemic in over a century, and the sharpest economic contraction since the second world war, global equity and bond markets staged one of the fastest recoveries of all time in Q2.
The 10 year US Treasury yield has remained remarkably steady over the last few months, particularly as inflation expectations have gradually risen.
Those stocks that outperformed during the corona crisis are the same ‘winners’ that outperformed before the crisis.
The recovery in US equity prices, from the corona crisis, has been one of the most rapid in history.
China’s economy has transitioned, from an industrial export-led model, towards services.
Commodities are nothing if not cyclical. They rise and fall in value with remarkable consistency over time.
Quantitative easing, or QE, is where a central bank creates money to buy bonds. The goal is to keep interest rates low and to stimulate the economy during periods of economic stress.
In January 2019 Jerome Powell pivoted from a policy of interest rate increases and balance sheet cuts to interest rate cuts and, later that year, balance sheet expansion.
Over the last decade, the Fed has increasingly resorted to unconventional monetary policy, such as quantitative easing, or QE, to stimulate the economy.