Market Commentary 2017

22nd December 2017

Catalan pro-independence parties win poll

The Euro fell sharply following the Catalan vote which resulted in the three pro-independence parties claiming a narrow victory, although the centre-right, pro-unionist Citizens party was the single biggest winner. The vote attracted a record turnout of more than 80%, dismissing fears that holding the election on a weekday rather than the usual Sunday would hit turnout. Spanish bonds fell along with peripheral European government debt, while stocks in Europe also struggled for traction with the Stoxx Europe 600 Index falling by 0.1% as of this morning. The result indicates that Spain’s political turmoil is set to continue, which is...

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20th December 2017

Crucial US Tax bill passed in Senate

The biggest US tax reform for decades has been voted through the Senate by 51 to 48, though must now go back to the House of Representatives today for review due to two provisions failing to meet Senate budget rules. Despite this, the bill is expected to be approved with small amendments. After the Republican's failure to repeal Obama Care earlier in the year, the US tax bill marks the first major legislative reform package to pass through congress since Trump's election victory. The planned $1.5 trillion of tax cuts is aimed at helping US businesses thrive and will see...

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14th December 2017

FED raises rates for third time in 2017

The Federal Reserve has, for the third time this year, raised the US interest rate by a quarter percentage point to 1.25 -1.5 per cent. Whilst the hike itself had been broadly priced into the market the FED’s indication of another three hikes in 2018 and a further two in 2019 served to put some clarity into the FED communication on the trajectory of short term rates. Markets however took the communication on future hikes as overly dovish which saw the dollar and sovereign bond yields fall in overnight Asian trading.

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12th December 2017

UK inflation peaks at 3.1%

The annual rate of change to UK inflation has peaked over 3% for the first time since 2012. The 3.1% figure is a full percentage point over the central banks long term inflation target of 2% and prompts Mark Carney, the Bank of England governor, to write a letter to Downing Street explaining why the central bank has missed its inflation target. The rapid rise of UK core inflation continues to be driven by the fall in the pound after the vote to leave the EU last year. Economists believe the 3.1% figure represents the peak of UK interest rates...

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6th December 2017

Sterling falls as DUP block Irish border agreement

Sterling has come under pressure this week amidst continuing political uncertainty regarding Brexit, falling for a third day of trading against major currencies. Since Monday, around the time rumours of a deal between Ireland and the UK over details of how to treat the boarder after Brexit were dashed, Sterling has lost around 1% against the US dollar, whilst falling 1.6% against the Japanese Yen. The negative reaction stems from the inability of Theresa May's government to reach agreement with the Democratic Unionist Party (DUP) which would allow the UK to move into the second and crucial phase of Brexit...

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4th December 2017

Republicans pass historic tax reform package

Over the weekend US Senate Republicans past a sweeping tax reform package in a 51 – 49 vote. Whilst both Senate and Congressional support for the cuts remains polarised over its impact on the US national deficit, the bill, which represents the largest tax overhaul in the US over the last 30 years, will see tax rates fall to 20% for US corporations and tax cuts to benefit the wealthiest Americans. Markets are expected to bounce back on the news after the selloff seen on Friday after ex national security advisor Michael Flynn plead guilty to lying to investigators over...

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29th November 2017

UK breaks Brexit deadlock

Theresa May has managed to secure the backing of Whitehall to offer a divorce bill to the EU of around €50bn which negotiators on both sides agree will almost certainly break the current impasse on negotiations. Whitehall’s backing of the larger bill is contingent with the UK being able to secure a good trade deal with the EU. Whilst the proposed figure is still tentative the pound has found some strength from the announcement, indicating the market is prepared to get behind the figure and the prospect of moving these delicate negotiations forward.

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22nd November 2017

UK growth forecast lowered in Autumn Budget

Chancellor Phillip Hammond has today delivered the Autumn Budget which included a raft of new measures to aid several key issues facing the UK economy. Most notably, the government is committing £44bn towards housing along with various tactics to encourage new development and a target of 300,000 new homes every year by the mid-2020s. Stamp duty will also be abolished for first time buyers to the value of £300,000. Brexit preparations will receive an extra £3bn, whilst the NHS will see spending increase by £2.8bn to ease pressure. Perhaps the most important announcements were the OBS downgrades to UK growth...

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1st March 2017

Trump delivers a light-on-detail speech

In his first address to Congress, Donald Trump appeared poised and presidential, which has no doubt given a boost to his popularity, however he delivered little in the way of specifics with regards to his policies. He offered little insight into the details of his proposed corporate tax cuts, border taxes or plans to loosen financial industry regulation. However he did reiterate the promises he has made to get these plans underway and also voiced support for Nato. The response from financial markets was muted, suggesting that all markets, including equity markets, will be wanting more details from Trump regarding...

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15th November 2017

US inflation on the rise

US consumer price inflation rose by 0.1% last month, core CPI which strips out oil and food prices was slightly stronger at 0.2%. Price improvement came from the second hand car market and medical services which both posted positive price gains, overall drug prices remained steady. Last month’s CPI print is enough to tip the year on year inflation rate in the US up to 1.8% from 1.7%. With the depreciation in the dollar coming from 2017 and steady levels of unemployment we can expect to see upward pressure on US headline inflation in 2018 and should this materialise we...

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14th November 2017

UK inflationary pressure slows in October

CPI Inflation figures for the year to October have come in below consensus forecasts of 3.1%, holding flat at 3%. Though this level of inflation remains the highest the UK has seen in 5 years, the month-on-month increase of 0.1% represented a slowing of inflationary pressure from the previous month. The Bank of England's (BoE) recent interest rate hike was a step to address rising inflation since the Brexit vote, though further hikes over the coming years may be expected, as the BoE has signalled, if inflation does not return to the target rate of 2%. In response to the...

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10th November 2017

UK GDP improves to 0.5% over three months: NIESR

A monthly estimate of UK economic output from the National Institute of Economic and Social Research (NIESR) has shown a slight improvement in growth, with a 0.5% expansion in the three months to October compared with the previous Office for National Statistics reading of 0.4% in the three months to September. The same think-tank is predicting a real GDP growth rate of 0.5% for the last three months of 2017. The central reason for this improvement in growth is being chalked up to increasing international demand thanks to a weaker home currency making UK goods and services more attractive. Following...

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10th November 2017

Mixed UK output but trade deficit narrows

UK industrial output increased for fourth months in a row in the 12 months to September, beating economic forecasts. A rise of 2.5% was seen which is the greatest year-on-year increase since February. At the same time, Britain's trade deficit with the rest of the world has narrowed for the second month in a row as demand increases for goods exported, closing the gap by £700m to £2.75bn. Construction, on the other hand, has fallen for the second quarter in a row to the end of September, and stood at a 1% increase year-on-year which was below the lowest forecasts....

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3rd November 2017

Jay Powell named as next Federal Reserve chairman

President Trump has named Jay Powell as the next Federal Reserve chairman. Mr Powell, an existing Federal Reserve governor since 2012 is considered a more dovish candidate with ideals closer to that of Janet Yellen, his predecessor, than the more hawkish John Taylor who was also seen as a potential candidate. This appointment from the President represents a continuation of the status quo at the central bank that should help to preserve both the growth environment seen in the US economy, and the sustained rally from the US stock market. Predictably, US markets did not react to the appointment nor...

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2nd November 2017

BoE raises rates for first time in a decade

The Bank of England (BoE) has today voted seven-to-two in favour of raising the UK’s base rate from 0.25% to 0.5%. This interest rate rise represents the first time the BoE has raised the base rate since 2007. The largest argument the BoE put across for the rate rise was the fact that inflation continues to run at 3%, ahead of their 2% target. It has, however, been termed a ‘dovish hike’, given that the BoE has stated that two hikes in the next three years is sufficient to return inflation back to its 2% target, which reflects a very...

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1st November 2017

Eight people dead in latest NYC terror attack

Eight people have been killed in a New York terror attack that took place yesterday afternoon. Shortly after 15:00 local time, a white pick-up truck rented from retailer Home Depot struck cyclists and pedestrians while being driven along the city's lower west side cycle track killing eight people and injuring eleven more. The truck finally came to a stop after crashing into a school bus, the suspect was shot and arrested as he exited the vehicle.

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27th October 2017

US GDP beats forecasts as Tech earning impress

A combination of strong earnings from US tech companies and better than expected GDP growth have seen US markets rally today, with the US dollar also seeing significant strength against major currencies. US year-on-year GDP came in at 3% up to the end of September, compared with forecasts of around 2.2%. The US dollar index, a measure of the currency against a basket of peers, is currently up 0.45%, helped in part by weakness in Sterling and the Euro today. The NASDAQ, America's tech-heavy stock market, has rallied strongly, currently up around 1.8%, whilst the S&P 500 – the 500...

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26th October 2017

ECB to begin tapering Eurozone QE in January 2018

Mario Draghi, president of the European Central Bank, struck a dovish tone at today’s meeting on monetary policy for the single currency block. Draghi announced his intention to begin tapering the European QE project down to monthly purchases of € 30 billon from January next year. Whilst this is a meaningful figure, one must remember that the proceeds from existing bonds will continue to be reinvested back into the bond market. Draghi went on to state that despite the tapering programme, there will be an ample degree of monetary stimulus remaining. Markets took this as an overly dovish statement that...

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25th October 2017

UK GDP recovers some poise in Q3

Early estimates from the Office for National Statistics suggest UK GDP improved slightly in Q3 with growth of 0.4%, beating forecasts and bringing year-on-year growth to 1.5%. Economic Growth was lead predominantly by Services and Manufacturing sectors over the summer. Today's GDP release is an improvement on Q2 figures which saw 0.3% growth. However year-on-year growth of 1.5% still lags other G20 countries and historical norms for the UK, underlining the effect of Brexit uncertainty. The pound rallied on the news which caused the FTSE 100 to begin selling off, UK government debt was also being sold down on the...

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23rd October 2017

Prime minister Abe wins majority for historic third ter

Markets reacted positively on the news that prime minister Shinzo Abe has won a super majority in the most recent snap elections in Japan. With a two thirds majority for the Liberal Democratic party-led coalition the prime minster begins his historic third term at the helm of the Japanese economy. With this victory Abe now has a much stronger mandate from the country to continue pursuing his economic reform agenda coined Abenomics. The PM also intends to begin implementing new constitutional reforms in Japan, starting with a clause to recognise the legality of Japans armed forces. With the Yen weakening...

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16th October 2017

Bank of England to take over key interest rate benchmark

From April 2018, the Bank of England (BoE) will be taking over the administration of the Sterling Overnight Index Average (Sonia), the reference rate that was chosen to replace the London Interbank Offer Rate (Libor) earlier this year. Sonia is used to value Sterling-based derivatives and has replaced Libor as the benchmark rate at which banks will be willing to lend to each other. The benchmark is also important to the wider economy as it is used to set the rate of other instruments such as mortgages and corporate debt. Libor came under close scrutiny following scandals involving rate-rigging, and...

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13th October 2017

US price inflation falls short in September

US Consumer price inflation for September came in weaker than expected at 0.5% with core inflation rising 0.1%. The headline figure was largely driven by a surge in gasoline prices during the hurricane period. US government debt rallied off the news with yields coming down on the longer dated debt maturities. The FED have, however, intimated over the year that the slow rise in inflation is more down to temporary factors over anything more systemic within the economy and the same is true with the September print. This central bank sentiment along with robust US growth numbers have seen investors...

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6th October 2017

Mixed US jobs data increase Fed hike expectations

US stock markets have opened lower after data on job creation showed 33,000 fewer employees on payroll for the month of September – the first loss since 2010. This comes after recent hurricanes caused severe disruption to parts of the country which is thought to have hurt smaller retailers and businesses in particular, but follows an average of 91,000 jobs being created in the three previous months. Offsetting the news that job creation had contracted, other figures also showed an uptick in wage growth, up year-on-year from 2.7% to 2.9% and well past expectations of 2.5%. The rise in wage...

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6th October 2017

Pressure mounts on May as rate hike decision nears

Following an ill-received party conference speech by Teresa May on Tuesday, pressure is mounting for the Conservative party to initiate a leadership contest, casting doubt on the stability of the UK political situation and the implications this has for already slowly progressing Brexit negotiations. Today, Conservative party members have been calling publicly for the leadership contest and it is looking increasingly likely that the Prime Minister's position has become untenable, though key figures such as Michael Gove have been speaking to defend her role as party leader. The political disquiet has hit the pound, which has, since yesterday, had the...

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3rd October 2017

UK economic conditions falter as incomes fall

Construction activity in the UK has fallen for the first time in 13 months as companies in the commercial building sector shy away from taking risk. The 'Purchasing Managers' index showed the sector be in contraction in September, which comes shortly after Monday saw a similar survey for UK manufacturing return weaker than expected sentiment. Though still in expansion, the manufacturing sector has lost momentum since the Brexit vote, leading to fears that a material slowdown in the UK economy is crystallising. Following these releases, new data today has also shown that consumers are facing the largest fall in real...

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28th September 2017

White House unveils long awaited corporate tax

President Trump yesterday announced proposals for the highly anticipated US Tax reform and hailed an end to the taxation of non-US earnings. Trump proposed cutting the official corporate tax rate from 35% to 20%, whilst this fell short of the 20% cut promised in the election campaign markets and CEO’s in the US have taken the news positively. Treasuries in the US sold off on the news against a stronger dollar and small cap equity market which represents the US sector set to benefit most from a cut to the corporate rate. The proposed new 20% level ensures US corporates...

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25th September 2017

Merkel’s CDU party take 4th term in German election win

Angela Merkel of the Christian Democratic Union party has secured her place as German Chancellor for a fourth term. Whilst this election outcome was widely predicted, the euro has been shaken by how close the race to the Bundestag was. Merkel’s CDU party took 32.7% of the vote which is an 8% slide from the 2013 election and represents the worst result for her party since 1949. Election momentum was, instead, swinging towards the nationalist, right-wing “AfD” party that took 12.6% of the vote on a manifesto of anti-immigration. The last right-wing party to have a seat in the Bundestag...

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21st September 2017

FED to begin paring back its $4.5tn balance sheet

The US Federal Reserve voted yesterday to keep rates steady but indicated it was open to the idea of one further interest rate hike in 2017. FED commentators are lending the greatest probability of a 0.25% hike to the US base rate coming this December. However, ahead of the meeting, markets had already priced in a 50% probability of a December hike which left the actual stock market reaction somewhat muted despite a near 1% rally in the dollar. The main announcement from FED chair Yellen was the intention to begin paring back their multi trillion dollar balance sheet as...

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14th September 2017

Bank of England sets hawkish tone....

Despite a vote of seven against two to keep UK interest rates on hold at historic lows of 0.25% at this month's Monetary Policy Committee (MPC) meeting, the Bank of England has today indicated strongly that it is ready to begin lifting rates later this year. The MPC has also predicted that inflation is likely to reach over 3% in October, well above the 2% target, and is likely to remain above target for the next few years. The intention to hike rates was caveated, however, with the guidance that should there be a concatenation of bad economic data in...

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13th September 2017

Mixed UK jobs data

Data released by the Office for National Statistics showed the UK unemployment rate for the three months to July had fallen to 4.3 per cent, its lowest level in 40 years, indicating an increasingly strong labour market. In contrast, wage growth disappointed with average weekly earnings excluding bonuses growing at 2.1 per cent over a three-month period, well below the 2.9 per cent inflation rate last month. This shows that the value of people's earnings has in fact fallen, despite the figure being higher than the same period in 2016 and up from 2 per cent in the three months...

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12th September 2017

UK Inflation figures surprise & EU repeal bill progresses

Month-on-month inflation figures for the UK have beaten forecasts today, coming in at 0.6% ahead of the 0.3% consensus, bringing the year-on-year figure to 2.9%. FX markets have seen Sterling rise strongly against peers, with it currently up 0.84% against the US Dollar, 1.03% against the Euro and 1.22% versus the Japanese Yen. The converse effect has been for the FTSE 100 index to fall into the red, currently down -0.23% as exporters see their profits fall. The news also has potential to affect this week's Bank of England policy meeting, with the expectation being that a more hawkish mood...

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7th September 2017

European Central Bank keeps rates on hold

Mario Draghi, president of the ECB, has today announced the decision to keep the bank's main refinancing rate at the historical low of zero. Draghi also signalled that the main decisions regarding the process of phasing out the 60 billion euros-a-month bond-buying scheme will be made in the next meeting in October. He said that the strong euro is weighing on the central bank's considerations about scaling back its monetary stimulus by acting as a 'source of uncertainty'. Growth forecasts were revised up from 1.9 per cent to 2.2 per cent for this year, while the stronger euro has caused...

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4th September 2017

North Korea conducts its most powerful nuclear detonation

Geopolitical tensions are once again at the forefront of markets on Monday, after North Korea successfully tested what is suspected to be a hydrogen bomb capable of riding a long-range missile, leading to reports that Pyongyang is preparing a major advancement in its nuclear capabilities. The US responded with threats to use its missile defence system, Thaad, which has never been used against an enemy before and which China sees as a threat to the region’s ‘strategic equilibrium’. South Korea’s President Moon has shown his support of this, calling for a review of US and South Korean military planning to...

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29th August 2017

North Korea missile launch

Haven assets such as gold and the yen were boosted on Tuesday after a ballistic missile was launched from North Korea's capital, Pyongyang, triggering a response from President Donald Trump who reiterated that 'all options are on the table' in terms of halting North Korea's nuclear and missile program. Investors in Asia took risk off the table which meant stocks suffered, while the yen strengthened to its highest level against the dollar since mid-April and gold was up as much as 0.9 per cent in Asia trading to its highest level since November as investors sought haven assets amid the...

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16th August 2017

UK inflation holds steady, while jobs data beats forecasts

UK inflation data released yesterday showed prices rose by 2.6% last month, just below analysts’ expectations of 2.7%. The rise in food, clothing and household goods prices was offset by the 1.3% fall in fuel prices. Meanwhile, wage growth for the second quarter rose to 2.1%, above estimates of 2%, while unemployment came in better than forecast at 4.4%. This helped to dampen the concerns about a deterioration in living standards in the UK, which was highlighted in data released showing a fall in UK consumer spending in July for the third consecutive month, according to analysis of Visa card...

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9th August 2017

Risk-off tone grips markets after Trump threatens N Korea

Investors are taking risk off the table today, after another standoff between the US and North Korea resulted in President Trump threatening ‘fire and fury like the world has never seen’. The situation was escalated when North Korean leader, Kim Jong Un, said he was examining an operational plan for firing a ballistic missile towards Guam, where an American military base is situated. Haven assets such as gold and the Japanese yen rose, while the Vix volatility index moved off its lows, to the highest level it has been in a month. European equities fell following their Asian counterparts lower...

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4th August 2017

US economy creates more jobs than expected in July

It has been yet another bumper month for US payrolls, which shows job gains of 209,000 in July, above market estimations of 183,000. With equity and currency markets reacting positively on the news, the figure is yet another indicator of the world's largest economy continuing to show healthy signs of a sustained recovery. For FED chair, Janet Yellen, this figure will add further weight to the argument that the US is ready for a third rate hike in 2017.

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31st July 2017

US GDP steady into the third quarter

The dollar saw another bout of weakness as US GDP data released for the second quarter showed the world’s leading economy expanding at 2.6 percent. This was an expansion but not the expansion the market was hoping for. The underwhelming GDP print combined with a stubbornly low rate of inflation has cast the possibility of a third rate rise in the US into doubt and this is what appears to be moving market sentiment. With the dollar trading lower and US treasury yields continuing to sell off both the market and the FED are in wait-and-see mode for the remainder...

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27th July 2017

Dovish FED questions 3rd rate hike this year

Last night’s meeting of the Federal Reserve saw US FED chair Janet Yellen set an overly dovish tone on the trajectory of US monetary policy. Markets pushed aside her comments on possibly shrinking the $4bn FED balance sheet as soon as September and instead chose to latch onto her acknowledgement that core US inflation targets were remaining softer than expected. This acknowledgement sent a message to markets that a 3rd rise in the US base rate might not happen this year. The S&P, Dow, and the Nasdaq all responded to the news by closing yesterday’s trading near new highs whilst...

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26th July 2017

UK Growth remains subdued, borrowing falls slightly

Economic growth has risen marginally in Q2, up from 0.2% in Q1 to 0.3% in the three months to June. Year-on-year, growth has fallen from 2% to 1.7%, showing a slowdown is taking place, but nonetheless reflects a resilient economy considering inflation has been picking up throughout the year. Whilst the GDP figures were in line with average forecasts, new UK mortgage approvals have slightly beaten forecasts, with total mortgage borrowing remaining relatively flat at around £13 billion. 40,200 new mortgages were approved in June, down from 40,287 in May. Other borrowing such as personal loans have fallen slightly (around...

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20th July 2017

ECB and Bank of Japan keep monetary policy on hold

As expected, the European Central Bank (ECB) has announced it will leave interest rates unchanged in its press conference held earlier today. Mr Draghi reaffirmed the view that Europe still has plenty of way to go in its recovery and a substantial amount of stimulus is still needed to support this growth, downplaying his hawkish comments on the eurozone recovery made at the end of last month. Mr Draghi has also said there is no specific date when the ECB will think about a change in its bond buying programme, but pledged to step up its 60 billion euro-a-month quantitative...

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18th July 2017

UK inflation falls to 2.6% on lower oil prices

Inflation in the UK ran at 2.6% in June, year-on-year, coming as an unexpected fall from 2.9% the previous month. The primary reason was attributed to lower oil prices after recent falls in the commodity price, yet items such as food and clothing are still increasing for the consumer. The news, which does not bode well for the Bank of England hiking interest rates any time soon, has weakened Sterling against major currencies to a degree, though comes in the midst of an otherwise turbulent day in FX markets. UK government debt became more attractive as the less likely rates...

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18th July 2017

Republican’s suffer second defeat on Obamacare repeal

Last night in Washington the Republican party abandoned their latest attempts to repeal Obamacare. The Republicans were forced to admit that after a 6 month battle with the repeal act they were unable to get it passed. In what has been seen as another setback for the White House political commentators are speculating about Trump’s fall in approval ratings and his ability to complete anything during his term as president. Markets reacted accordingly with the dollar selling off against all major currencies with European markets expected to open lower today.

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7th July 2017

US jobs number at 222,000 exceeds market expectations

US employers added another 222,000 jobs over June. The figure surprised on the upside as markets predicted a figure of 178,000. Average hourly earnings rose by 2.5% but missed estimates of 2.6%. With the US now drawing ever closer to full employment markets are asking how much longer can the US jobs market continue to deliver forecasting busting employment numbers. Low wage inflation with an ever tightening labour market has left investors speculating on how this effects the FED’s path of rate hikes. Equity markets notched up on the news with US debt seeing some short term weakness.

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4th July 2017

N. Korea successfully test latest ICBM

Markets are treading softly today after the announcement that North Korea have successfully test fired a long range ICBM (inter-continental ballistic missile). The missile flew for 40 minutes and splashed down in international waters just 200 miles from Japan with no reported damage to any vessels in the area. With the latest test being the 11th launch from North Korea this year, President Trump called on Asian leaders to “end this nonsense once and for all”. With the US closed for Independence Day markets in Europe appear to be taking the news in their stride with no large negative moves.

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29th June 2017

Sterling strength after Carney lays out rate hike intentions

Sterling pushed higher yesterday on the news that Mark Carney, Governor of the Bank of England, would vote to raise interest rates should business investment increase in UK. This represents a small but significant hawkish shift from the Governor who has, until now, voted with the majority of committee members to keep rates either where they are or to take them lower. The comments come as the UK faces increasing inflationary pressure yet after Carney said only last week that now is not the time to raise rates. UK government debt came under increased pressure as markets sold bonds, an...

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28th June 2017

ECB hints at strengthening case of for tapering QE

Mario Draghi, President of the European Central Bank (ECB) has indicated that the time may be approaching to start reducing the long standing asset purchase programme (QE) in the Eurozone, saying 'All the signs now point to a strengthening and broadening recovery in the euro area,' but that monetary policy must be kept constant for the time being. Signs of reflation were mentioned, but that the recovery is not quite stable enough yet to take firm action. This small shift of sentiment has been enough to cause waves in EU markets, particularly in bond markets where prices have been falling...

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26th June 2017

Government reaches deal with DUP after soft consumer data

The Conservative government has reached a deal with the DUP party in order to secure a majority in the Houses of Parliament, offering a degree of certainty going forward into early Brexit negotiations. The 'confidence and supply' deal allows May's government to pass legislation contained in the Queen's speech and budget, though likely at the cost of significant incentives for the DUP, including not least, giving priority to the issue of a potential post-Brexit hard border in Ireland. Details are expected to follow soon. UK equities have seen a rally, despite a strengthening pound acting as a headwind for FTSE...

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19th June 2017

Another Terror incident in North London as van drives into pedestrians

Another potential terrorist incident in London has occurred in Finsbury Park in the early hours of Monday morning. A van reportedly drove into pedestrians outside a Muslim welfare house, 1 person has been killed with several more injured. Bystanders tackled the perpetrator to the ground who was later arrested. The attack is believed to have been aimed at a Muslim community during the holy month of Ramadan and is the fourth terror incident in the UK in recent months. The police have yet to confirm this is another terrorist incident.

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19th June 2017

Emanuel Macron wins big in French parliamentary elections

Emanuel Macron’s En Marche party has secured a sweeping majority in France’s second round of parliamentary elections winning a total of 350 seats out of the total 577. Marine Le Penn, the main presidential opponent to Macron secured just 9 seats. With national turnout at just 43% this was a record low for voting numbers, none the less the majority Macron now has allows the President to begin implementing his big French reform agenda. Finally, Philip Hammond, UK Chancellor of the Exchequer reaffirmed that the UK will leave the single market as well as the customs union when it withdraws...

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15th June 2017

BoE surprises markets with hawkish rates vote

Expectations for a UK interest rate rise have jumped sharply following today's meeting at the Bank of England (BoE) where the closest vote in six years was had. Three members of the Monetary Policy Committee wished to raise rates this month from their record lows citing rising inflation, causing market expectations for a rise next month to jump to around 50%, up from 10% before the meeting. The FTSE has already come under pressure today from continued post-election fallout, recent downbeat economic figures and troubles in the mining sector that makes up a significant share of the FTSE 100. UK...

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15th June 2017

FED moves on a June rate rise

The US federal reserve has, for the second time this year raised the countries base interest rate from 1 to 1.25%. The move has come in the midst of a string of weak inflation numbers prompting the FED reiterate they expect inflation to normalise at 2% but confirmed they are watching it ‘very closely’. Markets were quick to note the dropping of any reference regarding a concern from overseas markets indicating a more optimistic global outlook from the FED. Central bank policy makers indicated they were still on course for another quarter point increase this year and fully expected this...

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9th June 2017

Conservatives to form a coalition with the DUP

Theresa May has reached a deal with the Democratic Unionist Party (DUP), allowing the Conservatives to form a coalition government with enough combined seats to proceed with their legislative programme. The support of the DUP's 10 seats will bring the combined majority to 328 and leaves the remaining parties no chance of forming their own majority. The Prime Minister has argued that this coalition is the best means of ensuring certainty through Brexit negotiations, which EU leaders have been quick to point out will still be worked to the original timetable. Sterling remains under pressure from today's election result, though...

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9th June 2017

Ex-FBI director Comey testifies to US Senate

James Comey, former FBI director, has given a much anticipated testimony to the US Senate in which he describes a 'disturbing' number of one-on-one meetings with the President, almost entirely centred on the matters of ex-National Security Advisor, Micheal Flynn, Comey's tenure and potential investigations into Russian ties throughout the 2016 Trump election campaign. The ex-director was questioned for many hours and covered several other issues, including the treatment of investigations into Hilary Clinton's emails and President Trump's alleged request for Comey's loyalty. President Trump has today tweeted that he now feels vindicated of any wrongdoing and that Mr Comey...

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9th June 2017

May’s snap election forces UK Politics into a hung parliament

The UK’s snap election has ended in a hung parliament this morning with the current Conservative government taking just 315 seats, down 11 seats from their previous majority. Labour took 261 seats, up 29 from their previous count. Mrs May called the snap election to cement her standing within the current UK government, this strategy has very much backfired amid calls from the Labour party for Mrs May to now resign. The job for the Conservative government will be to begin constructing a coalition of supporting parties to form a majority and continue with the job of exiting the UK...

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5th June 2017

‘Enough is enough’ May declares after second terror attack

On Saturday night, a rented van drove at pedestrians over London Bridge, the assailants then got out and began a knife attack in the bustling area of Borough market killing 7 and wounding 48 before armed police shot and killed the perpetrators. This, the second terror attack on British soil in an many weeks has failed to deter the general election from taking place on Thursday of this week. Prime Minister May said ‘We cannot and must not pretend that things can continue as they are’ she vowed to step up Britain’s fight against Islamic extremism. Mrs May is calling...

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2nd June 2017

US job numbers fall short of expectations

US jobs data released today, less than two weeks before the next Federal Reserve meeting, showed that employers added fewer jobs than expected in May. Employers added 138,000 jobs in May, which was less than Wall Street’s expectation of 182,000, while April’s gain of 211,000 was also revised lower to 174,000. This contrasts with the fall in the unemployment rate, derived from a separate survey of households, to 4.3% from 4.4%. Following the announcement, the US dollar and 10-year Treasury yield fell to their lowest levels since the election of Donald Trump last November. Though this was not what financial...

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2nd June 2017

Trump pulls out of global climate deal

President Trump has announced that the US, the second biggest emitter of greenhouse gasses after China, will be pulling out of the Paris Agreement – a pact aimed at tackling climate change. Trump claims the deal unfairly disadvantages the US, costing over 6 million jobs and US $3trillion in GDP, but that he may also be willing to renegotiate an alternative. The US now joins Syria and Nicaragua as the only countries not supporting the deal, but will not be able to officially leave the agreement for about 4 years. The move has sparked uniformed condemnation from world leaders who...

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1st June 201

Prime minister’s absence at televised debate sparks controversy

Just 8 days before the UK’s snap elections, seven party leaders gathered for a televised debate to outline their view for the UK. However, the absence of Prime Minster May dominated the debate as the other party leaders took time to lambast her absence as evidence she was unfit to lead the country. In her stead the Home Sectary, Amber Rudd stood in, rationalising her absence by stating Mrs May was occupied preparing for Brexit negotiations. Commentators prised the Home Sectary on her performance under pressure coming from the seven other party leaders. Today Mrs May will endorse the message...

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25th May 2017

UK Q1 GDP downgraded, OPEC extends production cuts

UK GDP growth for the first quarter of 2017 has been downgraded from 0.3% to 0.2% by The Office for National Statistics (ONS), showing the economy to be growing at a slower rate than previously thought. The ONS highlighted consumer-facing industries such as retail and accommodation to be detractors and that rising prices were playing a part as household spending fell. FTSE equities are showing little reaction hours after the news and are currently trading flat, with Sterling only seeing slight depression. UK Government debt is being bought, sending yields downwards, however. The oil cartel, OPEC, has also today agreed...

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23rd May 2017

Election campaign halted after Manchester terrorist attack

A suspected terrorist suicide-bomb attack at the Manchester Arena following a pop concert has left 22 dead and many more injured – the worst attack of its kind since the 7/7 London bombings. Politicians have responded in solidarity by halting election campaigning for the day and Prime Minister, Teresa May, has announced the UK general election will also be postponed for 24 hours. EU leaders have begun sending their messages of condolences after the second terrorist attack on British soil in a little over a month.

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19th May 2017

Global markets shaken by US political turmoil

Events unfolding on the US political scene have given markets pause for thought as many equity markets continue to fall for a second day, though in the US equity futures are suggesting yesterday's sharp fall has been stemmed for now. The news that President Trump may have requested ex-FBI director, James Comey, to drop investigations into possible ties between his campaign and Russia has seen markets favour safe haven assets such as government debt and gold. This reaction is a reflection of growing concerns that Trump's pro-business policies, such as lowering tax, may be stalled yet again – or in...

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8th May 2017

Pro-EU candidate Emmanuel Macron sweeps to election victory in France

Last night French Presidential candidate Emmanuel Macron swept to victory to become France’s next President. The youngest ever President at just 39 years old won with 66% of the vote against Marine Le Pen of the Front National who took 34% of the vote. The Euro jumped in Asian trading after the news broke, likewise, markets in both Europe and UK open higher today on the news that political volatility in Europe has dramatically decreased on the news that France will continue to be governed by a pro-EU candidate. All eyes now look to the ECB for more direction on...

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5th May 2017

US labour market remains healthy

US payrolls data released today shows 211,000 jobs added in April, which is over 20,000 more than forecast and significantly more than the 79,000 jobs added in the month of March. The unemployment rate, which was expected to rise from 4.5% to 4.6%, unexpectedly fell to 4.4% and is now the lowest it has been since May 2007. The majority of these employment gains were concentrated in services, while manufacturing and construction jobs also rose, but at a weaker pace than the start of the year. The data shows that the US labour market remains healthy and signal positively for...

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5th May 2017

France’s two presidential candidates go head-to-head.

Emmanuel Macron and Marine Le Pen faced off in the first head-to-head televised debate of the campaign on Wednesday. The debate served to highlight the stark differences in their visions for the future of their country. Macron underlined security and tackling terror as a priority, accusing Le Pen of being complacent about the subject, while Le Pen accused Macron of being 'the candidate of savage globalisation'. He responded by referring to Le Pen as 'the high priestess of fear'. The pair also clashed on the future of the EU. Le Pen said she would call for an in-out referendum on...

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4th May 2017

Federal Reserve keeps rates unchanged

The US Federal Reserve has kept interest rates on hold in the range of 0.75 per cent to 1 per cent as expected, however they have left open the possibility of raising them next month. The reason for keeping monetary policy unchanged was due to a slowdown in growth during the first quarter of the year, however the Fed are generally optimistic about the overall health of the US economy, with the view that this slowdown in growth is more likely to be transitory. They highlighted the strength of the labour market, solid consumer spending and business investment and inflation...

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28th April 2017

US GDP falls short after Trumps first 100 days

As President elect Trump comes up to his first 100 days in office the US released GDP data showing lacklustre growth figures for the first quarter of 2017. GDP grew at just 0.7% in Q1 2017, this growth figure is the slowest three month growth figure since 2014. Growth figures were dragged down by a falloff in consumer spending on big ticket items such as cars and televisions. Positive growth areas came from international exports, business and housing investment. This slowdown in growth will give both the White House and the Fed plenty to think about when it comes to...

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28th April 2017

UK Q1 GDP figures fall short of expectations

Results for UK GDP growth in the first quarter show the economy grew only 0.3% to 2.3%, less than half the rate of growth from the same period in 2016. The weaker rate of expansion may point to the effects weaker Sterling has had on UK price inflation and spending power. Despite the disappointing figures, the economy remains resilient in the face of Brexit and it is likely the Bank of England will continue to keep monetary policy highly accommodative throughout 2017 in order to steady the economy. UK government bonds are seeing moderate selling and the FTSE All Share...

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27th April 2017

Trumps tax reforms leave investors wanting more

Yesterday President elect Donald Trump announced a raft of amendments to the US tax structure. The tax amendments were touted by the White House as the biggest in US history. A sharp reduction in corporate taxes from 35% to 15% and a simplification in the tax bands on individuals were at the centre of the cuts. What was also on the table was a ‘one time’ reduced corporate tax rate to induce US companies to re patriate trillions in profits being held overseas. With investors being underwhelmed by the lack of clarity in the specifics, commentators have begun to speculate...

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24th April 2017

Macron and Le Pen move to second round in French presidency

Yesterday French voters headed to the election polls in the first of the two rounds to elect a new French president. Out of the five candidates running for office it was centralist and pro EU candidate Emmanuel Macron who came out on top with 23.9% of the national vote and far right leader Marine Le Pen coming in second with 21.4% of the vote. France will once again head to the polling booths on May 7th to decide who of these two will take up the French presidency. Polls for the second round have put a 60% probability of centre...

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18th April 2017

UK snap election called for 8th June

The UK Prime Minister, Theresa May, will be presenting a motion to the House of Commons tomorrow to call a snap general election on the 8th of June. May has accused the UK's other political parties of jeopardising the outcome of Brexit negotiations and argued that calling an election now will help provide stability throughout the next few years. Sterling saw some volatility following the announcement but ultimately rebounded above pre announcement levels. The FTSE 100 has begun to extend earlier losses and could be expected to see increased volatility in the run up to the election.

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7th April 2017

President Trump launches military strike against Syria

Under the proviso of protecting US national security, President Trump last night ordered two US destroyers in the Mediterranean to launch a salvo of 59 Tomahawk missiles aimed at the Shayrat air base. The base is home to Assad's Syrian air force and where the recent gas attacks are believed to have been launched from. The US strike been seen as a clear indicator the Trump administration will not be playing by the same rules as the previous administration. Markets went long haven assets with Gold, Yen and US treasuries all rallying strongly overnight in Asian trading. European equity markets...

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5th April 2017

Far left’s Mélenchon wins French’s second presidential debate

Last night saw the second round of the French presidential debate which, over 3 hours saw the 11 candidates’ discuss foreign policy, terrorism, economics and EU membership. Latest polls suggest the winner was far left leader Jean-Luc Mélenchon with 25% of people believing he was the most convincing. The two leading candidates clashed on the Eurozone policy. Centre candidate Emanuel Macron accused far right candidate Le Pen of wanting to start a an ‘economic war’ in her pursuit of taking France out of the single currency. With recent polls suggesting that 25% of the French electorate are still undecided on...

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29th March 2017

Britain triggers historic Article 50

Prime Minister Theresa May, last night, signed the historic letter signalling Britain’s intent to leave the European Union. At 1.20pm today, Sir Tim Barrow, Britons ambassador to the EU will present Donald Tusk, the European Council President with the letter of intent. Prime Minister May was keen to stress her intent to build bridges with EU nations in what has been seen by many as a softening of rhetoric from No.10 in an attempt to smooth out the exit process. Sterling has seen some weakness in Asian markets as global investors seek to distance themselves from the currency ahead of...

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27th March 201

– President Trump fails to repeal Obamacare

President Trump, on Friday, failed to secure backing from congress on legislation to repeal former President Obama’s Affordable Care Act. Main opposition came from a group of staunch conservative Republicans called the ‘Freedom Caucus’. The US dollar and the S&P 500 sold off in the wake of the result, European markets have also opened up lower today on the news. Failure to repeal Obamacare has been seen by markets as a stumbling block to the President being able to deliver on the reform agenda he was elected to introduce, this is causing some nervousness. The White House was keen to...

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21st March 2017

Sterling jumps as UK Inflation exceeds 2% target

Consumer Price Index figures have beaten the consensus 2% forecast for February, revealing inflation running at 2.3% year-on-year. This compares to January's rate of 1.8% and represents the first time since 2013 that it has exceeded The Bank of England's 2% target. Sterling has seen strong gains against major currencies such as the US Dollar and Japanese Yen in the immediate wake of the news, gaining 0.85% against the US Dollar and helping to send the US Dollar Index - a measure against a basket of its peers – below 100 for the first time since February. This appreciation will...

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21st March 2017

‘En Marche’ takes 1st round in French presidential debate

Monday night saw the first round of Presidential debates held in France. In what was seen as a lively debate, candidates traded repeated blows on the French economy, Eurozone membership and Islam, as well as a good measure of personal jibes. Polls taken just after the 3 hour debate put Mr Macron of the ‘En Marche’ party as the overall winner despite the ex-economic minister taking flack on his suitability to govern the country at just 39 years of age. The French electorate are set to head to the polls in a little over a month for the first round...

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16th March 2017

Market relief as Dutch far-right defeat

Geert Wilders' far-right party has failed to defeat the centre-right Prime Minister, Mark Rutte, in the Dutch general elections yesterday, allowing EU markets to breathe a sigh of relief as worries over growing populist movements subside for the time being. Wilder's party have come in second place, losing by a wide margin, yet Rutte's VVD party has slipped by 8 seats in parliament. This morning the Eurostoxx 50 index, a representation of EU-wide blue chip companies, has gained around 1%. The Euro index, which measures the currency against a basket of its peers is down modestly by 0.1% at the...

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16th March 2017

Federal Reserve raise the US interest rate but advocate caution

The US Federal Reserve chair, Janet Yellen, yesterday evening announced the first US interest rate rise of 2017. The rise saw the US base rate move up from 0.5% to 0.75%-1%. This signals the first of what is widely expected to be 3 rate hikes in 2017. She did however temper any jubilance in markets by releasing a very cautious message extoling the virtues of vigilance and positive data in today’s uncertain world. It was this cautious tone that caught a predominantly jubilant market off guard. None the less, with the Federal Reserve definitely picking up the pace of increases,...

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15th March 2017

Hammond scraps week old National Insurance rise.

Chancellor Phillip Hammond, today, announced his intention to scrap the proposed increase in National Insurance tax on the self-employed introduced a week prior in the spring budget. Despite the loss of £500m a year the amendment has been seen as a politically fuelled U-turn to stem the backlash from the party back benchers on breaking a Conservative 2015 election promise not to raise the tax burden on the self-employed.

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14th March 2017

Green light in the commons for Article 50

Yesterday Prime minister May defeated parliamentary opposition to the issuing of Article 50. The defeat enables her to start exit negotiations in Brussels at the end of the month as anticipated. The amended bill passed through the House of Lords a second time, unimpeded. Nicola Sturgeon, leader of the Scottish National Party took the opportunity to demand a second referendum on Scottish independence before the two year exit negotiations conclude. Commentators widely expect May to comply with this but only after the UK has concluded EU negotiations ensuring she is not fighting on two fronts. In an otherwise flat market,...

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10th March 2017

Strong US jobs data signals March rate hike

US Non-farm Payroll figures for February surprised markets with the addition of 235K new jobs. The figure is 23% higher than the consensus forecast of 190K. This came with an acceleration in wage growth of 2.8% with the largest increases being seen across the construction and manufacturing sectors. February's robust numbers forced market expectations for a March rate hike to rise off the news. In opening trading US stock markets reacted positively to the news

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9th March 2017

Growth and inflation revised up as ECB holds rates

Mario Draghi, President of the European Central Bank (ECB) announced today that, not only will they be keeping European interest rates on hold, but that the central bank will also be standing ready to increase its asset purchase program (QE) should it need to. QE, which was meant to be tapered towards the end of 2017, could now be extended longer as it is claimed to be showing material benefits to the EU economy. EU GDP forecasts have received a slight increase, up 0.1% to 1.8% for 2017, whilst inflation has also been forecast higher to 1.7% for the year....

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8th March 2017

UK growth upgraded in Spring Budget

The UK's 2017 Growth forecast has been upgraded from 1.4% to 2% as Philip Hammond delivered the Spring Budget today. Forecasts for 2018 to 2019 have been cut marginally, however, yet the prediction for 2% growth in 2021 still stands. Other key points included an accelerated reduction in net public borrowing, particularly for the current financial year, and a rise in National Insurance contributions that will hit the self-employed, potentially raising significant revenues for the Tax Office. Sterling, which depreciated in the today's run-up to the Budget, has failed to recover fully and stands around 0.18% lower against the US...

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23rd February 2017

Federal Reserve minutes signal next rate rise

Minutes released today from the US Federal Reserve’s January policy meeting have revealed that many of its members are ready to raise interest rates again in the near future. Other members, however, expressed concerns about uncertainty over the effects of President Trump’s policies – such as tax cuts and fiscal spending – and maintained that the central bank should be prepared to take action if the US economy falters from its recent strong performance. The next meeting is due on the 14th March, at which time futures are pricing in a 34% chance of a rate hike, showing a degree...

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15th February 2017

US Inflation rises to 2.5%

Odds of the US Federal Reserve increasing interest rates in March have increased after US inflation data came in above expectations at 2.5% for January, up from 2.1% previously. As inflationary pressures mount, so too does pressure on the Federal Reserve to continue normalising interest rates. Robust economic data at this stage adds weight to the US central bank's hawkish view. US data on consumer spending grew for the fifth consecutive month in January, showing that the change of presidency has yet to have a material negative impact on consumer habits. US industrial production fell short of expectations with a...

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14th February 2017

UK Inflation reaches 1.8%

UK Inflation hit its highest level in two and a half years in January, reaching 1.8% and bringing it closer to the Bank of England’s target rate of 2%. The central bank expects UK inflation to rise to as much as 2.7% by the end of the year, brought about primarily by Sterling’s depreciation. Food and transport were areas where inflation was felt the most, with prices rising, and set to rise, in order to keep up with the growing cost of imports. Inflation above the Bank of England’s 2% target is likely to hurt consumers spending power, assuming wage...

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10th February 2017

UK economic outlook improves, again

Today the UK welcomed fresh data that showed Britain’s trade deficit had narrowed by more than forecast in addition to industrial and manufacturing production beating expectations. This comes on the same day the UK had its rate of GDP growth upgraded from 0.6% to 0.7% for the three months leading to the end of January. Taken together, the UK economy has put on a real show of resilience since the vote to leave the EU and continues to surprise markets to the upside. Today, the FTSE 100 was up around 0.4% at the time of writing, whilst most other markets...

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9th February 2017

UK Parliament votes for the triggering of article 50

Last night the UK government voted in an overwhelming majority of 494 votes to 122 in approval of the triggering of article 50. This flies in the face of previous speculation that the triggering of the treaty might be stalled in the House of Commons. The historic vote has been hailed as a victory for the nation who voted to leave the EU. Prime minster May managed to force a 3 line whip on the vote and quash a late rebellion from some of the more staunch remain MP’s. Labours attempt fell short with Mr Corbyn seeing 52 Labour MP’s...

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3rd February 2017

US starts off 2017 with bumper Jobs number

US employers added a further 227,000 jobs to the US economy in January 2017 which came in above analysts’ expectations of 180,000. Sectors such as construction, retail and finance were amongst the biggest growth sectors. In contrast wage inflation in the US slowed to just 2.5% over January 2016, this figure came in below expectations suggesting there is still some slack in the US jobs market. Many market commentators continue to theorise on how President Trump intends to create another 25 million new jobs with the US labour market nearing full employment.

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3rd February 2017

BofE upgrades UK growth forecasts and keeps rates unchanged

The Bank of England’s Monetary Policy Committee (MPC) has voted unanimously to leave monetary policy unchanged. The bank’s main interest rate will remain at its record low of 0.25 per cent and it will continue with its planned purchase of corporate bonds, which will rise to £10bn over the next year. The bank have also upgraded growth forecasts for the next three years, predicting 2 per cent this year- up from November’s 1.4 per cent forecast, based on forecasts that consumer spending will slow less quickly this year than was predicted in November, despite rising inflation. The pound, which had...

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2nd February 2017

May wins commons vote and FED keeps rates on hold

Wednesday evening saw Prime Minster May win a historic mandate to move forward with article 50 from the House of Commons. MP’s voted by 498 to 114 in favour of giving the Prime Minister the power to invoke the EU treat’s Article 50 exit clause. Across the Atlantic the US Federal Reserve opted unanimously to keep short term interest rates on hold at the start of 2017. Markets failed to react in any great measure to the announcement as the outcome was widely expected. The FED went onto signal that it remains on track for more rate hikes this year...

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30th January 2017

Trump ban’s travel into US from seven Muslim countries

Over the weekend President Trump issued his most controversial executive order to temporarily block travel into the US from seven Muslim countries. This announcement has rounded off an extremely vocal first week in office. World leaders along with some of the world’s largest companies joined together in their condemnation of the executive order. The success of Prime Minister May’s trip to the US in which she strengthened the UK’s “special relationship” with the US was short lived as MP’s campaigned for the UK to rescind the invitation to host President Trump at Buckingham Palace later this year unless the ban...

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26th January 2017

UK economy beats forecasts

The UK economy has beaten forecasts, growing at a rate of 0.6 per cent in the fourth quarter of 2016, above the 0.5 per cent figure estimated. This was mainly driven by strong consumer spending and expansion of the services sector, but the manufacturing sector also grew strongly and reversed much of the contraction of the third quarter. Industrial production was unchanged from the previous quarter. Overall, the figures show strength and resilience of the UK economy, which was in fact the fastest growing economy in the G7 last year, despite the political headwinds. However, it is important to note...

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24th January 2017

UK supreme court rules in favour of parliament vote on article 50

The UK Supreme Court this morning ruled by 8 justices to 3 that parliament must hold a vote on Brexit and that the government cannot use royal prerogative to trigger article 50. The ruling has put parliament firmly at the centre of the triggering of article 50. As a result, Theresa May is expected to push a brief bill through both houses of parliament to comply with the ruling. There still remains speculation that even a brief bill could be stalled should politicians wish to challenge the proposed exit strategy. Across the Atlantic President Trump sought to make an impact...

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23rd January 2017

Donald J Trump sworn in as the 45th President of the United States

Donald J Trump begins his first week in the White House today. Friday 20th of January saw his inauguration as the 45th President of the United States of America. His tumultuous relationship with the US press surfaced again as he rubbished reports over low attendance at the inauguration ceremony. On matters of state, there still appears to be speculation about his first week in office as key positions within the president’s inner cabinet have yet to be filled. The president will this week meet with Theresa May to discuss all issues pertaining to Russia, NATO and a bilateral UK-US trade...

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18th August 2017

13 killed in Barcelona Terror attack

Spanish police have reported a potential terror attack in Barcelona’s Las Ramblas district. Reports from the scene said a white van mounted the pavement and drove into the crowds in the tourist district resulting in as many as thirteen fatalities. The attacker has reportedly fled the scene on foot. Police also shot and killed five terrorists wearing explosive belts in a town south of Barcelona In which is believed to have been a secondary attack. Futures markets in Europe are all negative today as investors stand away from the European market on the news.

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