US: Interest rate cut weighs on equities

• US equities fell after the Federal Reserve lowered interest rates for the first time in 10 years by 0.25%, blaming global economic uncertainty and trade tensions1;
• Meanwhile, the US economy added 164,000 jobs in July, in line with forecasts, although June’s figure was revised down from 224,000 to 193,0002.

• Omnis view: The markets were disappointed that the Fed decided against reducing rates by a greater margin and by comments from chairman Jay Powell claiming this was an isolated adjustment rat...

LAST WEEK – KEY TAKEAWAYS

UK: Political manoeuvring boosts sterling

• Sterling recovered from its lowest level against the US dollar in two years as MPs backed an amendment
which would make it harder for the next Prime Minister to suspend parliament ahead of the Article 50
deadline on 31st October;
• The amendment to a bill unrelated to Brexit requires ministers to update the House of Commons in October
on progress to restore the power-sharing executive in Northern Ireland.

• Omnis view: There were signs that the EU might be softening its sta...

LAST WEEK – KEY TAKEAWAYS

US: Dovish Federal Reserve boosts equities

• Federal Reserve chairman Jay Powell warned that economic uncertainty had increased recently in testimony to the US House of Representatives;
• Meanwhile, US inflation marginally beat expectations to increase by 0.1% in June compared to May and by 1.6% compared to a year earlier1.

• Omnis view: US equities hit a record high as Powell’s warning, which appeared to overlook the easing of trade tensions between the US and China and the recent improvement in domestic economic...

LAST WEEK – KEY TAKEAWAYS

US: Job market rebounds in June

• Yields on US government bonds rose and the US dollar strengthened against other major currencies as the US economy beat forecasts to add 224,000 new jobs in June1;
• Meanwhile, trade optimism following the constructive meeting between President Trump and Xi Jinping at the G20 summit propelled US equities to a record high, although Trump threatened additional tariffs on European goods in response to EU subsidies for the aviation industry.

• Omnis view: The rebound by the US job mar...

LAST WEEK – KEY TAKEAWAYS

Trade: Broadening of tensions weighs on US equities

• US equities fell after US President Donald Trump claimed the US was not ready to agree a trade deal and warned tariffs on Chinese goods could increase substantially;
• China responded by threatening to limit the export of rare earths- metals used widely in the technology industry- in which it dominates supply;
• There was further pressure on US assets at the end of the week when President Trump threatened to impose tariffs on Mexican goods unless the country ma...

Brexit: May’s resignation triggers Tory leadership contest
• Sterling rose against the US dollar after Theresa May announced she would resign as Prime Minister on 7th June;
• Mrs May’s announcement triggered a leadership contest in the Conservative party, with Brexiter and former foreign secretary Boris Johnson the early favourite to succeed her;
• Meanwhile, the Conservatives and Labour suffered heavy losses in last week’s EU elections in the UK which saw the recently founded Brexit party win the most seats in the European parliament;
• Based o...

LAST WEEK – KEY TAKEAWAYS

Trade: China raises tariffs on US goods
• US equities fell at the start of the week after China raised tariffs on an additional $60 billion worth of American
goods;
• US President Donald Trump’s optimistic tone in a series of tweets on Tuesday helped equities rebound, but
his decision to blacklist Chinse tech company Huawei weighed on markets at the end of the week.
• Omnis view: The markets also welcomed President Trump’s pledge to delay tariffs on car imports for six
months, although he was trying to avoid a confronta...

Brexit: Uncertainty weighs on sterling 

• Sterling weakened against the US dollar on Wednesday after a series of ‘indicative votes’ failed to secure a majority for any of the alternatives to the Prime Minister’s withdrawal deal;
• Among the most popular proposals were a customs union and a referendum on the final deal;
• There was further bad news for sterling on Friday when Parliament rejected Mrs May’s deal for a third time- by a smaller margin than before- despite her offer to resign if it passed.

Markets: Concerns over global growth pu...