25th March 2019
Brinkmanship and extensions
Every few months, I spend a few days of the week travelling across the UK with Cambridge’s relationship
management team updating regional gatherings of financial advisers. This time around, it was not
surprising to find most of the conference rooms filled with anxiety about the risk that Brexit may bring to
their clients’ investments. Our market update presentation only touched on Brexit towards the end,
where we had somewhat reluctantly dedicated a slide to the possible investment outcomes of various
scenarios. But we put most attention on the latest global monetary and economic developments.
US Fed’s change of course perhaps more fundamental than expected
The Federal Reserve surprised markets on Wednesday by announcing that they no longer expect any
more rate rises this year, and only one next year. At the end of their two-day meeting in Washington,
members of the Federal Open Markets Committee (FOMC) voted unanimously to keep rates in the 2.25-
2.5% range – as widely expected – but made waves by significantly changing their “dots plot ”, a settingout of where each member expects their policy rate to be at points in the future.
Brexit 2019: The Only Game in Town
This week’s economic data tells us that Brexit pessimism has not yet hit the consumer. Compared to the
dreary political backdrop, the economic news-flow has looked positively sunny. Unemployment has fallen
to its lowest level in 44 years, personal tax receipts (for the start of the year) have been unexpectedly
high, public sector borrowing has improved, and even UK retail – the perennial “dead man walking” – is
not faring that badly.
A look at what’s driving precious metals
Palladium’s meteoric 62% surge over the past 12 months – soaring to a record high of $1600 an ounce –
has left investors scratching their collective heads. Palladium’s rise stands in stark contrast to small falls
seen in the rest of the precious metals complex, like gold (-1%), platinum (-9%) and silver (-6%).