Wyn Thomas - Axys Investment Management

Quarterly Market Outlook Winter 2018

REVIEW OF THE PAST QUARTER:

It proved to be a case of too much good news being bad in October. Strong employment growth, little inflation and, mainly, US Federal Reserve chairman Jerome Powell’s “long way” from neutral interest rate comment sparked a treasury yields rally. In turn, bond market contagion spread to the rest of the global markets. Since then, Powell appears to have cooled on further hikes, bringing ‘safe-haven’ assets back to life. However, one of the key indicators of an upcoming recession – the spread between ten-years and two-year US treasury bonds – has been steadily tightening and is now close to the point of inversion. Read more…