29th June 2018
Ignore politics at your peril
It has been one of the more unnerving weeks in financial markets and judging by some of the questions from advisers and clients, the media was effective in using the commotions to sell copy through exaggeration. While new puns - Italexit, Parmageddon and QuItaly - were created to heighten the sense of drama, stock and bond markets made a roller coaster ride to end the week more rather than less were they had started.
UK economy – political doldrums create noticeable drag
Whether having voted Remain or Leave, the lack of meaningful progress in Brexit talks and the effect this has on the UK economy is not good news.
The Italian Job
Italy’s political drama not only stole headlines and the concern of global capital markets this week. In typical Italian fashion, the third largest economy in the Eurozone appears to finally have a government, at the third attempt in a week.
China’s Rebalancing Act: Don’t be fooled by strength
Media reports have pointed to good news from China of late. Reuters noted on Thursday that the manufacturing PMI (Purchasing Managers Index, which tends to lead economic growth) came in at an 8-month high of 51.9, above April’s 51.4 and analysts’ expectations of a slowing 51.3. That means that China’s manufacturing has posted a reading above the 50 mark (which separates growth from contraction) for 22 consecutive months.
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