A brief insight into the latest market dynamics and details of any changes occurring within our model portfolios.
Confusing statements from the Bank of England…
The Governor of the Bank of England, Mark Carney, suggested that the removal of stimulus “may be necessary”, however, only last week he said it was not the time to increase interest rates!
Not the only confusion…think Europe
Mario Draghi, President of the European Central Bank (ECB), stated that he was growing increasingly confident about the Eurozone recovery and that “deflationary forces have been replaced by reflationary ones”. The comments were taken that the ECB would taper its bond buying programme. Senior figures in the ECB later signalled that markets had misinterpreted Mr Draghi’s remarks. The Euro still rose as a result.
US Data solid
The upward revision in the US of GDP was due to consumer spending. The numbers however still denote a slowdown from last year.
Gary’s market comments in conjunction with our investment partners
No portfolio actions for LGT Vestra this week.
The risk with fixed income is still that interest rates rise sharply and hurt the capital value, this is particularly a problem for cautious clients who tend to have more invested in bonds.
U.K. Gilts have seen a decline as Brexit uncertainty grows. In the US, Treasuries appear to have priced in interest rate hikes for now.
7IM continue to diversify their portfolio protection strategies, using duration as a hedge against equity positions.
Sources: LGT Vestra and 7IM