Snapshot - Strategy & economics
Caspar Rock: Monday markets - the week ahead on 19 August
Markets remain troubled by a range of factors including Italian political events, weakening European economic data – and the inversion of the yield curve.
- Last week saw markets particularly excited about the inversion of the yield curve (where short dated bond yields are higher than longer term ones), an historic indicator of recession.
- This is only a leading indicator with a significant lag. Previous instances of yield curve inversion saw stronger equity markets before any recession.
- Elsewhere markets were troubled by domestic political events in Italy and Argentina.
- This week will bring publication of the minutes of the latest Fed meeting at the end of July (where rates were cut).
- The G7 meet in Biarritz over the weekend, and there will be side discussions about trade and Brexit.
- Given thin markets volatility cannot be discounted.
This article is issued by Cazenove Capital which is part of the Schroders Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.
This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements.
All data contained within this document is sourced from Cazenove Capital unless otherwise stated.