Risks in the international financial system have been rising for a while. In recent months bank valuations and some credit default swaps (CDSs – the rates at which banks insure each other) for European banks have reached levels not even seen during the Credit Crunch of 2008. Brexit has created a climate of uncertainty –…
One year ago the FED was discussing whether it should hike its key rate and thus reverse a policy trend that had lasted for a decade. By then, investors were anxiously awaiting such a move, and even expected a rate hike to be the first of many more to come (albeit gradually) over the course…
Another month of the phoney war in markets; range bound almost everywhere, except in Japan – which is performing well – and ahead of every other major market. (So it should: it’s the cheapest and best bet!). Don’t think for one moment that this quiet period and low volatility will last – I’ve just been…
Regular readers will know my stance on Brexit. And I voted as I did – after much reflection – well aware of the risk of turbulence ahead. Just as I anticipated that the Pound would descend, not in a linear fashion, but in steps. Until, that is, the end-game becomes clear. In a rational world…
In a decision that promises huge ramifications for investors, on 8 November the US electorate will cast ballot votes to decide who will become the next President of the United States. On one side is Hillary Clinton, who aims to extend the Democrats’ term in office to twelve years, while at the same time becoming…
Are tech valuations supported by fundamentals or are we partying like it’s 1999? 16 years since the bursting of the dot.com bubble, when the Nasdaq Composite Index fell 37% in the 10 weeks following its peak on March 10, 2000, the continued stellar performance of tech stocks and startups is once again raising eyebrows in…
It’s been a long, hot September, and global activity remains muted. The Fed has put tightening on Ice with the market now anticipating modest interest rate rises through next year, while the Bank of Japan is chucking the kitchen sink of extreme monetary policy at the problem of deflation. While markets struggled with a host…
The IMF has just accepted it was wrong about the post-Brexit Armageddon predictions. After all, since the Brexit-vote the FTSE 100 is up 11%, the services sector has expanded at a faster rate, and the ONS ended up revising its estimates for GDP growth higher in the second quarter, to 0.7% from 0.6% previously. In…
Don’t tell ze Britisch but ve really need zem… In a recent reflection on what central bankers get up to when they meet together for some rest and recreation, I attempted to explain what TARGET2 is. This is the settlements system that, since 1999, has facilitated payments between the various Eurozone countries’ internal settlement platforms.…
As readers are no doubt aware, OPEC recently agreed a production cut from its August output of 33.2 mb/d (million barrels per day) to a new target of between 32.5 mb/d to 33.0 mb/d. With OECD oil inventories expected at 3,090 million barrels by the end of this year, the agreed production cut is unlikely…
