On Wednesday September 16, the US Fed decided to leave the federal funds rate target range unchanged at 0.00-0.25%. The new monetary policy strategy that allows the inflation target to fluctuate around 2%, has also been put into practice from Wednesday.
Jerome Powell said more fiscal and monetary support may be needed as the US economic recovery pace is expected to slow down over time.
On Thursday September 17, the BoE made interest rates decision to keep the benchmark Bank Rate unchanged at 0.1%. The bank noted that there will be formal talks on negative interest rates with financial institutions and described the economic outlook as “unusually uncertain” due to coronavirus and Brexit.
On Thursday, a €44 billion recapitalisation scheme for Italy was approved by the European Commission. The aid scheme aims to improve Italian economy and labour market by providing financial support for large companies affected by the Covid-19 pandemic.
On Friday September 18, the US government issued an order banning the downloading of TikTok and WeChat in the US, starting from September 20.
On Wednesday September 23, US Manufacturing PMI will be released and is expected to come in at 53.4.
Germany IFO Business Climate index will be published on the Thursday September 24, expected at 93.8.
-1.0 A score of -1.0 indicates an extremely poor economic outlook, which is accompanied by a high probability of negative returns in risky asset classes like equities. The Risk Barometer tilts our portfolios away from equities during such periods.
0.0 A score of 0 indicates a neutral economic outlook with almost equal probability of positive and negative returns in risky asset classes like equities. The Risk Barometer maintains a balance between equities and other asset classes during such periods.
+1.0 A score of +1.0 indicates an extremely positive economic outlook, which is accompanied by a high probability of positive returns in risky asset classes like equities. The Risk Barometer tilts our portfolios towards equities during such periods.
*as at latest realignment 30/08/20
The performance of each asset class is represented by certain Exchange Traded Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at previous Thursday 4:30pm UK close. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated, but is not an indicator of potential maximum loss for other periods or in the future.