17 October 2016

Sterling: Lower for longer as the EU strikes back.

The UK’s new Prime Minister Theresa May’s honeymoon period is clearly over. Days after emphasising the importance of national sovereignty and appearing to lean towards a ‘hard’ Brexit, a dawn raid on sterling and subsequent weakness has given opponents ammunition to attack the UK’s plan to leave the EU. Furthermore, tough talk from the UK government has been reciprocated from EU leaders and European heads of state. President of the European Council Donald Tusk may even have given the game away by linking the concept of a ‘hard’ Brexit to ‘no Brexit’. For sterling, we believe investors should look through the politics and focus on the economics.

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30/03/2017
Equity strategy and market outlook - March 2017

In this month’s strategy piece, Alastair George believes that it is time to move back to a cautious rather than outright bearish position on global equity markets as both the Fed rate increase this month and the evident difficulties of implementing Trump’s policy agenda were relatively easily absorbed by markets, suggesting a degree of support at current levels in the short term at least. Nevertheless, strong survey data and equity market prices remain at odds with much more modest improvements in hard economic data and earnings forecasts; he therefore remains cautious on equities for the medium term.

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