The baseline scenario in our previous quarterly commentary was that global economic momentum, having bottomed in Q3 2019, would remain weak in early 2020 before strengthening towards mid-year.
The forecast here a year ago was that the MPC would cut Bank rate to 0.5% during 2019.
Paul O’Connor, Head of the UK Multi-Asset Team, gives his reaction to the UK election result and what it means for the Brexit process.
UK monthly GDP / gross value added (GVA) for October will be released on 10 December, two days before the election. GDP is currently estimated to have fallen by 0.16% in August and 0.07% in September, with the September level 0.10% below the Q3 average.
Oliver Blackbourn, a portfolio manager on the UK-based Multi-Asset Team, comments on the departure of Mario Draghi as ECB President on 31 October 2019, as the central bank itself potentially reaches the limits of what can be achieved using the levers of monetary policy.
Paul O’Connor, Head of the UK-based Multi-Asset Team, comments on the market reaction to the last minute plot twist emerging from the Brexit negotiations.
Euroland September flash PMI results were disappointing but monetary trends continue to give a hopeful signal for economic prospects.
Paul O’Connor, Head of the UK-based Multi-Asset Team, discusses the continuing trade war between China and the US, possible trade conflicts among other countries and how this has shaped his global outlook.
Oliver Blackbourn, a portfolio manager on the UK-based Multi-Asset team, discusses the abrupt escalation in hostilities between the UK Parliament and a bellicose Prime Minister.
UK labour market trends remain consistent with the view here that the economy has entered a recession.
Equity analysts returned from holiday and slashed earnings estimates.
August PMI results are consistent with the long-standing expectation here that global industrial momentum would bottom around Q3 2019 but narrow money trends have yet to signal an economic recovery. Turning points in industrial momentum are usually associated with a rotation in financial markets but the still-weak economic outlook suggests that any such change will be muted or delayed.
Nick Watson, a Fund Manager on the UK-based Multi-Asset Team, observes the hidden risks and relationships lurking in quality investment styles and the potential benefits of adding some complementary (but unloved) value styles to a UK portfolio.
Narrow money trends have been signalling US economic weakness but a stabilisation of momentum in Euroland, with no recession – see, for example, here. August flash PMI results are consistent with this scenario.
The preferred narrative of central bankers and mainstream economists is that current global economic weakness primarily reflects US-driven trade policy conflict, which has depressed business confidence and derailed expansion plans. This narrative is false.
Euroland money measures grew strongly in July, more than compensating for softer June data and suggesting improving economic prospects.
Oliver Blackbourn, a portfolio manager on the UK-based Multi-Asset team, discusses the abrupt escalation in hostilities between the UK Parliament and a bellicose Prime Minister.
Paul O’Connor, Head of the UK-based Multi-Asset Team, discusses the continuing trade war between China and the US, possible trade conflicts among other countries and how this has shaped his global outlook.
Paul O'Connor, Head of the UK based Multi-Asset Team, examines the market's response to the Fed's first rate cut in over 10 years.
Paul O'Connor, Head of the UK-based Multi-Asset team, discusses confirmation of Boris Johnson's appointment as UK Prime Minister and the highly uncertain outlook for Brexit that he, and his divided government, must navigate, and the likely market response.