Markets breathe a sigh of relief as world calms
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Markets breathe a sigh of relief as world calms

It is hard to describe the world’s current state as geo-politically calm, but all things are relative: compared to the last few weeks, things have returned to a semblance of normality. Markets, of course, like this fact. European stocks jumped by the most in a week, and Asian equities were trading in the green yesterday. U.S. stock futures were on the up.

These positive movements follow a weekend in which no more bad news has come from North Korea. They have also come as analysts have revised their disaster forecasts: while Irma still does incredible damage to the U.S., she is striking with “less force than feared” according to Bloomberg.

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In a note to investors, Chris Scicluna, head of economic research at Daiwa Capital Markets in London reiterated the fact that Hurricane Irma appeared “not to be as catastrophic as had been feared last week,” and that “thankfully there was no bad weekend news out of North Korea either. The better risk environment has seen Treasury yields move higher while the yen retreated.”

U.S. retail sales and inflation data will be emerging later this week, but we won’t get a commentary from any Federal Reserve speakers. They’re on blackout before the central bank’s policy meeting next week. Investors will no doubt be assessing the impact of natural disasters on U.S. growth in the meantime.

Also later this week, the Bank of England is expected to keep policies as they are, while ministers from the UK and the EU continue to lock horns over Brexit. India and China will both release economic data: India, the size of its trade surplus; China, August industrial production, retail sales, and fixed-asset investment. Australia will release jobs data on Thursday.

Disclosure

The opinions in this article do not reflect those of Dominion Fund Management Limited, and in the instance of any forward-looking statements, these should not be construed as advice.


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