- UK and US inflation figures miss expectations
- Federal Reserve increases Funds rate
- US economic data softer than expected
- Bank of England votes 5-3 to hold the base rate
- French party En Marche! secure convincing parliamentary majority
Imperium Capital Publication
Viewpoint – June 2017
The benign conditions that have prevailed in markets through the past six months continued into May, with most risk assets producing positive returns. Equity markets again produced the best returns, led by the UK, Europe (especially peripheral markets) and Asia, but bond markets also made solid progress, as yields drifted lower and credit benefitted from a favourable corporate backdrop. Perhaps the most notable features, however, were a further slide in the US dollar, which fell 2.2% in May on a trade weighted basis, taking its fall to 6.1% from its early January peak and reversing all of the post election surge; as well as a further drop in the oil price in the face of stubbornly high global inventory levels and evidence of surging oil shale production in the US. Also notable was the continuation of extraordinarily low levels of volatility across markets, with the VIX ‘fear’ index hovering at ten year lows, punctuated only very briefly in May by concerns that the Russia/Trump scandal could lead to a further weakening of the President and his ability to implement some of his reflationary and business friendly policies and even lead to his impeachment.
Weekly Digest – 11 June 2017
- Conservatives fall short of majority in UK election
- ECB revises core inflation and growth forecasts
- Limited market response to Comey testimony
- Strong US economic data reaffirms rate hike expectations
- US responds to Qatar and Gulf diplomatic crisis
Weekly Digest – 04 June 2017
- Equities higher with volatility falling
- Bond markets rise after muted inflation data
- UK polls indicate tight race ahead of Thursday’s election
- US May payrolls report disappoints
- Trump takes US out of Paris Climate Accord