Investment Talks: Brexit Muddles Through the Approaching Parliamentary Vote
Read the latest views from Pascal Blanqué, Group Chief Investment Officer, Amundi, Vincent Mortier, Deputy Chief Investment Officer, Amundi, and others in our latest issue.
In what was one of the more highly anticipated Federal Reserve decisions of the past few years, the Federal Open Market Committee (FOMC) voted unanimously to raise rates by 0.25% to a target Fed Funds rate of 2.25% to 2.50%. Read here
In the world economy, 2018 began based on the theme of a synchronised global recovery. But, this did not last. Since the spring, the protectionist measures taken by Donald Trump have changed the gameRead here
The Gilets Jaunes (Yellow Vests) are a largely spontaneous protest movement that emerged in France, in October. With no declared political affiliation, they called for lower taxes and a higher level of social transfers and public services. The protests, in our view, will have a modest negative economic impact on growth, as a consequence of two opposite effects: a fiscal stimulus (with an impact on public deficit) and damage to business and investor confidence. We have just reduced our forecast on French real GDP growth from 1.5% to 1.4% for next year, while the deficit, depending on the measures, could be higher than 3%, before declining in 2020.Read here
The latest G20 demonstrates some temporary progress in the US/China relationship. An increase of tariff rates in January 2019 was put on hold and the possibility for an additional tranche of tariffs for the rest of US imports from China ($267bn) is also further delayed, at least. China has found the right entry point to give some concessions to the US on sensitive topics for President Trump.We believe that neither this scenario nor the worst case of no agreement was completely priced in the market, even though markets partially discounted a weak scenario, with some risk of deterioration of China/US relationship and China’s economic slowdown. This, combined with a more dovish Fed, could support a relief rally in the short term.Read here
After the EU approval of the Brexit deal, we could pass through some tough time until the UK parliamentary vote on the Brexit Withdrawal Agreement in December. UK Parliamentary ratification of the deal will be very difficult and will likely bring new episodes of market stress. But we think the most likely scenario is that the deal will ultimately be ratified, and the UK economy should experience a slight acceleration in 2019 and 2020.Read here
The robust performance of the US economy in 2018 has led to the supremacy of US risk assets compared to the rest of the world. Moving towards the end of the year and into 2019, global investors have started to raise questions about whether the US economy and business sector will continue to shine, how inflation will evolve, and which direction the Federal Reserve will take going forward.Read here
We expect that volatility will remain in place in the next weeks due to trade tensions, US midterm elections, higher prices, CB policy noise, and uncertainty linked to the Italian fiscal policy.