- Growing political tension in Spain has unnerved Spanish bond markets with investors demanding an increased premium to hold the bonds. Catalonia voted overwhelmingly to secede from Spain, however the turnout rate for referendum, which the Spanish government had called illegal, was only 43%.
- Theresa May has come under increased pressure after her Foreign Sectary, Boris Johnson, released a 4,200 word article on how Britain should leave the EU, contradicting the Prime Minister’s earlier messages.
- South Korea have initially agreed to amend their free trade agreement with the US, after Donald Trump threatened that the US would completely remove themselves from the deal due to an increasing trade deficit with the country.
- Iceland has fallen into its first recession since 2012 after its tourist market, which accounts for close to 9% of GDP, has fallen sharply. Iceland’s central bank has decided to ease monetary policy in response by cutting their benchmark interest rate from 4.5% to 4.25%.
- On Tuesday 10 October we will see the release of the UK MoM industrial production data, with market expectations for an increase of 0.1%.
- On Friday 13 October we will see the release of US CPI YoY, with the market expecting this to come in at 2.3%.
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.
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.
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 30/09/17
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.