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As summer draws to a close, it was back to work for a lot of people this week, including UK politicians! The political turmoil which followed resulted in a volatile week for Sterling, whilst global equity markets posted modest returns.
After a disappointing end to last week following an escalation in US/China trade tensions, global equity markets rallied strongly this week on hopes that there will be a truce thanks to positive comments from Donald Trump.
Equity markets were dominated yet again this week by the US/China trade spat and speculation on central bank policy.
Whilst the past few weeks have been centred on sentiment overreacting to US President Donald Trump’s proposed September China Tariffs, earlier this week we saw conversations between both US and Chinese trade representatives result in the US delaying the 10% tariff on the majority of key goods until December, with the Chinese easing off on their proposed US agriculture tariffs.
This week has been much like a Sunday, following a ‘big’ Saturday night out… in that not that much has happened other than the hangover from the night before!
In a week that seemed primed to be dominated by central bank meetings and policy, in particular by the US Federal Reserve (Fed), it ended up being hijacked by none other than US President Donald Trump!
UK Media has been dominated by the change in government this week, however, the developments had little bearing on global equity market direction as investors were focused on the ECB’s monetary policy announcement and US economic data.
It would be wrong to conclude that it was a quiet week given global equity markets were little changed, as beneath the surface there were plenty of interesting stories bubbling away.
Global equity markets have been buoyed in recent weeks by the prospect of central banks loosening monetary policy.
As we entered the second half of the year, positive momentum in global equity markets continued as the side meeting at the G20 last weekend (29-30 June) between US and Chinese Presidents, Trump and Xi, concluded positively, giving markets a good start to the week.
