US and UK: The Comeback Kids
The US Dollar NEER has since 12th February appreciated about 2.3% to a 4-month high and its inverse correlation with the S&P 500 (-4.2%) has re-established itself. This is in line with our forecast that the Dollar’s sell-off in early February was “a small, short-term correction” rather than “another prolonged downtrend”. If anything we were […]
Transitional UK budget unlikely to rattle markets
The British Chancellor of the Exchequer Rishi Sunak will on 3rd March, at around 12.30 UK time, present to the House of Commons the annual budget for the United Kingdom. The ruling Conservative Party has a significant working majority of 87 seats in the lower house of parliament and we expect the budget to pass […]
Dollar – Diversification, rotation and valuations
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Event risk and market volatility: Partners in crime
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Retail sales key to UK economic growth recovery
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United Kingdom: Back to 1999… and to the future
Part Two of this Five-part series of Insights into the UK economy and financial markets examines the critical role played by the British government, which continues to pump tens of billions into the economy via a vast array of measures, including a furlough scheme, to support household disposable incomes and ultimately consumption and GDP growth. […]
United Kingdom: Anatomy of economy on lockdown life-support
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Bank of England’s dovish warning bells ring true
Bank of England dovishness should come as little surprise UK GDP growth was negligible over Q2-Q3 2019 – averaging only 0.04% qoq – and likely remained weak in Q4 at about 0.3% qoq. There are a number of endogenous and exogenous factors, both cyclical and structural, behind this weak domestic growth – a number over […]
Sterling’s made its mind up, UK voters not quite
Sterling has appreciated 1.5% in Nominal Effective Exchange Rate terms since 26th November to a 7-month high, a notable move in a world of depressed currency volatility. Markets have seemingly taken comfort from the (modest) widening of the gap between the ruling Conservative Party and opposition Labour party in opinion polls to about 10pp and […]