So far this year, market trends have been dominated by strengthening economic activity in Europe and Japan, continuing growth in the US and Asia, and subdued inflation. Amidst this backdrop, markets have generally been benign, characterised by strong equity performance and stable bond markets. These trends continued into July, with equity markets again producing the best returns, led by emerging markets, whilst bond markets progressed with credit and highyield bonds outperforming government bonds. Volatility remained extraordinarily low with the VIX index reaching all-time lows. Perhaps the most notable feature of the month was the further slide in US Dollar, down 2.9% on a trade-weighted basis during the month and 9.1% year-to-date, moving to levels of early 2015. Oil was also a major mover during the month, forming a sizeable recovery with Brent Crude up 9.9% during July, reducing its year to date fall to 7.3%. The partial recovery of Brent crude was triggered by Saudi pledges to cut exports together with the first signs that the shale oil boom in the US is slowing.
Imperium Capital Publication
Weekly Digest – 20 August 2017
- Eurozone GDP growth outpaces expectations
- US-North Korea tensions ease
- Japan reports strong GDP growth
- UK records negative inflation in June
- President Trump disbands Business and Manufacturing forums
Weekly Digest – 13 August 2017
- Oil prices finished the week -0.6% with Brent standing at USD 51.8
- Gold was up 2.4% and silver was up 4.9% on the week
- Global government bond yields continue to fall
- Bitcoin breaks the $4000 barrier
- Global markets react to rising tensions between US and North Korea
Weekly Digest – 6 August 2017
- Oil prices finished the week relatively flat with Brent standing at USD52.46
- Gold fell 0.9% to 1257.6
- Technology shares buoyed by Apple results
- An overall flat week on the markets with some upward momentum on Friday
Weekly Digest – 30 July 2017
- US GDP growth rebounds from disappointing Q1 growth
- Federal Reserve indicates imminent balance sheet normalisation
- US Senate begins healthcare legislation debate
- Brent crude rises 9.3% following Saudi export cuts
- Greece returns to the sovereign debt market after three year hiatus
Viewpoint – July 2017
The changes in tone from central banks drove global financial markets in June. The Bank of England and the European Central Bank appear unlikely to follow the path of the Federal Reserve in hiking rates this year. Political uncertainties in the UK grew in June following the Conservative party failing to achieve a majority just weeks before the beginning of already uncertain Brexit negotiations. In addition, questions linger over US economic policy and the ability to implement legislation.
Economic prospects in the Euro Area appear to be improving with GDP growth up to 2% this year, although inflation remains below target. The US has continued to grow, with an annual GDP growth rate of around 2%, whilst the UK has outperformed post-Brexit expectations, albeit with signs of a slowdown ahead. Emerging markets have benefitted from loose global monetary policy conditions and accelerating growth. In turn this has benefitted corporate profits, with earnings rising above the stagnant conditions of the past 2 years, up over 10% year-to-date in the US, and beyond this in Europe and Japan.
Weekly Digest – 23 July 2017
- US equities advance to all-time highs
- Bank of Japan revises inflation target deadline
- Euro surges 1.8% versus US Dollar, spurred by ECB meeting
- US Healthcare reforms quashed by lack of congressional support
- US Press Secretary Sean Spicer resigns
Weekly Digest – 16 July 2017
- Oil prices rose 4.7% on the week with Brent standing at USD49 a barrel
- Gold rose 1.4% to 1228.5
- MSCI All-Country World Index set an all-time high for the week closing at 473.78
- More evidence of strength in the global jobs market
Weekly Digest – 9 July 2017
- Oil prices declined just over 2.5% last week
- Drop in global government bonds accelerated
- G20 summit shows the divide between the US and others
- UN security council hold an emergency session in response to North Korea
- Global stocks jumped and are still at near record high
Weekly Digest – 2 July 2017
- Oil prices climb around 5% last week
- Volatility makes a comeback moving to 10.9 on the VIX index
- Global equities trading near record highs
- Technology stocks under pressure with continued sell offs
- Central banks adopt a hawkish tone around fiscal tightening