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A Challenge and an Opportunity

Aug 10, 2022

9:48 am

• Markets challenged by central banks determined to squeeze out inflation • The Bank of England delivers a very sobering assessment of the UK economy • The possibility of fiscal easing by a new UK Prime Minister only pressures the BoE to raise rates still further than previously envisaged • Despite higher rates sterling is…

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Put pivot

Aug 5, 2022

5:32 pm

The US FOMC meeting was the highlight of July 2022, where the US Fed chair, Jerome Powell, emphatically denied that the US was in a recession despite two successive quarters of GDP contraction. The Fed raised rates by 75 bps, in line with market expectations, and guided that they would be data-dependent for future hikes….

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Trying to Keep an Open Mind

Aug 2, 2022

11:25 am

• Equity market rally discounts a re-run of the Goldilocks scenario • We accept the idea that US inflation may be peaking but we fear it will be sticky at around 5%. • We struggle with market’s pricing that the Fed funds rate will peak at the turn of the year • US corporate earnings…

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The Dollar – the Best of a Bad Bunch

Jul 26, 2022

11:24 am

• Dollar – few alternatives to the currency at present • Euro – too few positives • Sterling – under pressure from politics and inflation • Yen – likely downside risk until the Fed baulks at recession risk • Swiss franc – has safe haven status backed by a likely positive interest rate by September…

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