Wyn Thomas - Axys Investment Management

Quarterly Market Outlook Autumn 2019

REVIEW OF THE PAST QUARTER:

Weakening global economic data triggered by heightened political uncertainty and renewed US-China trade tensions spurred central banks to continue down the dovish path this quarter. The US Federal Reserve cut rates by a quarter of a percentage point twice over three months. The Bank of England maintained rates but will look to reduce them if Brexit uncertainty continues. Finally, outgoing European Central Bank chairman Mario Draghi lowered interest rates and restarted the bond-buying scheme, all while urging key member states like Germany to open their purse strings and help combat slowing growth. Read more…

Wyn Thomas - Axys Investment Management

Weekly Market Commentary 27th September 2019

BORIS AND DONALD STIR UP STRONGER POLITICAL HEADWINDS

This week much of the news has been dominated by two political scandals; the court ruling that Boris Johnson acted unlawfully by proroguing parliament, and the developing news that Donald Trump tried to pressure Ukraine into investigating a political rival by withholding military aid. While both could turn out to be fatal for their perpetrators eventually, the immediate impact is surprisingly little. MPs have secured an extra couple of weeks back in parliament but they may not be able to do much with it. Likewise, in the US, Democrats and Republicans remain at loggerheads over impeachment. Read more…

Wyn Thomas - Axys Investment Management

Weekly Market Commentary 20th September 2019

KEY CENTRAL BANKS SEND DOVISH SIGNALS

This week we saw more central bank action, as the world’s major monetary policy makers try to cope with a slowing global economy. In the US the Federal Reserve cut rates by a quarter per cent, following the lead set by the European Central bank last week. The move wasn’t enough to please the president, who has been a vocal supporter of more aggressive action, but still enough to split opinion in the bank. While there is a real fear that a slowdown is coming, the US economy is stubbornly showing few signs of actually slowing down. Policy makers are wary of fighting a phantom recession but delaying might mean the slowdown coincides with the election, hence the tweets. Read more…

Wyn Thomas - Axys Investment Management

Weekly Market Commentary 13th September 2019

DRAGHI URGES EUROPEAN GOVERNMENTS TO INCREASE PUBLIC SPENDING

This week while the UK might be paralysed over Europe, the same can’t be said for the European Central Bank, which announced a major change in policy in its attempt to stave off a recession within the Eurozone. The actual policy, a 0.1% cut in deposit rates and a resumption of QE is not so drastic but the language used points to a more fundamental shift in the banks approach. ECB President Mario Draghi made it clear that boosting inflation was now the banks main focus and the ultra-loose monetary policy could be here to stay. Draghi urged member states to capitalize on cheaper rates and spend more, a statement sure to irritate Germany who have so far resisted loosening the purse strings. Read more…

Wyn Thomas - Axys Investment Management

Weekly Market Commentary 6th September 2019

BORIS HAS A CHASTENING WEEK AS OPPOSITION DEFY NO DEAL BREXIT

We mentioned last week the potential of fireworks in Parliament and so it came to fruition – with all of them aimed at Prime Minister Boris Johnson. Boris has had a spectacularly bad week. Highlights include, MP’s successfully backing legislation to stop a No Deal Brexit, a member of his own party switching sides mid speech and also politely being asked to leave the town of Morley. Not to mention the small matter of his brother Jo Johnson resigning from the Tory party and having to expel 21 rebel MP’s. Read more…

Wyn Thomas - Axys Investment Management

Weekly Market Commentary 30th August 2019

BORIS MOVES TO SUSPEND PARLIAMENT

As we march towards the Brexit deadline, Prime Minister Boris Johnson has decided to play his hand and take an unprecedented step by attempting to suspend parliament for five weeks. Much like in football when a team holds the ball close to the corner flag, Boris Johnson is simply running down the clock. By muzzling Parliament, he is either confident that the opposition is weak enough not to oust him and form a replacement government, or if they do, he will play the role of the conductor, championing the will of the people in the ensuing general election. Read more…

Wyn Thomas - Axys Investment Management

Weekly Market Commentary 23rd August 2019

BUSINESSES EXPECTING A RECESSION

This week there were no end of strange headlines, from Trump tries to buy Greenland to Trump declares himself the chosen one, but its likely they were all an attempt to obscure the one headline that really mattered; the latest survey of purchasing managers that suggests US businesses are expecting a recession. The PMI survey is an indicator of sentiment, but if enough people believe there will be a recession it can become a self-fulfilling prophecy. The markets and industry are now expecting a recession, if this pessimism spreads to the consumer, one could be here sooner than we think. Read more…

Wyn Thomas - Axys Investment Management

Weekly Market Commentary 16th August 2019

MARKETS AMPLIFY GLOBAL HEADWINDS

This week was another eventful one for global markets. They fell at the start of the week on news that Trump was going to ramp up his trade war with China, rose when he decided not to and then plummeted again when weak data out of China and Germany stoked fears of a global recession. So far global GDP is slowing rather than falling, but markets worry that a slow to act Fed and a needlessly disruptive trade policy will make the difference between stalling and falling. Hence the extreme reaction to every bit of news in either direction. Read more…

Wyn Thomas - Axys Investment Management

Weekly Market Commentary 19th July 2019

WHY ITS TIME TO REVIEW MONETARY POLICY INDICATORS

This week the world has been focused on those two hardy perennials, Trump and Brexit. The former for being racist and the latter for parliament acting to contain the new prime minister. At this point however, these events hardly qualify as news. Instead we’ve been taking a closer look at the finer points of monetary policy. Following the Fed Chairman’s admission that the link between economic growth and inflation might not be what it was, we find multiple instances of central banks rethinking their approach. The European Central Bank is looking at revising its 2% or below rule to be more accommodating of above target inflation, while there is also speculation a Labour government could increase the BofE’s 2% target in the future. Read more…

Wyn Thomas - Axys Investment Management

Weekly Market Commentary 12th July 2019

UK NAVY BLOCKS IRANIAN ATTEMPT TO CAPTURE BP TANKER

This week saw the UK get dragged into the simmering Middle East conflict between the US and Iran, when the Royal Navy had to intervene to prevent the Iranians from seizing a British tanker in the key shipping lane of the Strait of Hormuz. While this act of aggression has got a lot of attention, it follows on from the UK seizing an Iranian oil tanker off the coast of Gibraltar last week and arresting the Captain. While the ship was suspected of breaking sanctions on Syria, the retaliation was hardly unexpected. This tit for tat state sponsored piracy can probably be resolved without further escalation. Read more…