Gerald Fitzgerald’s Market Review August 12th
12 August 2019
LAST WEEK IN 30 SECONDS...
Market volatility spiked last week as the US China stand-off escalated. Global Equities in euro terms finished the week down -1.6% with unsurprisingly the Chinese stock market, the Shanghai Composite, leading the charge lower and down -3.3% for the week.
“Safe haven” assets spiked with Gold up 3.9% for the week and German 10-year bund yields breaking -0.60% at one stage before reversing marginally. Meanwhile ongoing political risk has seen the pound sterling fall to 93p versus the euro with parity now being questioned before deadline day. Italian political risk raised its head last week in turn the Italian 10-year bond yield spiked by 0.29%.
THIS WEEK IN 30 SECONDS...
Political risk continues to drive short term market volatility with Brexit, the potential for fresh elections in Italy being called along with the meandering trade discussions between the US and China.
From an economic data perspective, Wednesday sees a significant release of data from China and Europe with both regions providing updated GDP and industrial production figures. Markets will assess this information closely to ascertain whether the data points to a continuing economic slowdown.
WEAKER YUAN DRAWS AMERICAN IRE
China was called a currency manipulator by the US last week, a move which is seen as upping the ante in the ongoing trade stand-off. The US sees China’s efforts at letting its currency devalue versus the US dollar as a means of mitigating the full impact of higher tariffs. The stand-off continues.
By Gerald Fitzgerald, Investment Consultant
Gerald Fitzgerald joined Invesco’s Investment Consulting team in 2015 and has 10 years industry experience assisting clients with their investment & actuarial requirements. Gerald is a Qualified Financial Adviser (QFA) and a graduate of both University College Cork and University College Dublin.