Global growth ploughs on while markets take a breather

Rather unsurprisingly, investment returns’ upward momentum slowed in Q2, and in some cases reversed, following the very strong results of the first quarter. In particular, June developed very much along the lines we had anticipated, which was that, with economic growth perspectives returning from ‘gushing’ back to ‘new normal’, capital market investors reassessed valuations and concluded that there was not much headroom left.

Lost decade for UK productivity

This week, data from the Office for National Statistics (ONS) gave many economists food for thought on the UK economy. Productivity, as measured by output per hour, fell 0.5% in the first quarter to a level last seen during the financial crisis. However, there was a divide. Services output continued to shrink while manufacturing output rose, perhaps due to the weaker sterling we have experienced since the Brexit vote.

EU reaches trade deal with Japan

The EU and Japan have come to a “political agreement” on opening trade barriers. The ‘in principle’ trade deal was given blessing on Thursday by Japanese Prime Minister Shinzo Abe, along with EU council and commission presidents Jean-Claude Juncker and Donald Tusk respectively, when they met for a summit in Brussels. The agreement isn’t yet a full signoff from the powers that be, but it covers more than 90% of the issues up for discussion, and officials are optimistic that a full trade treaty will be wrapped up by the end of the year.

US rate setting committee minutes point to further rate rises

The core message from the June FOMC (Fed) minutes released this week appears to be ‘steady as she goes’. This suggests that the US central bank remains on-track for its third interest rate rise in 2017, absent any nasty economic shocks or surprises.


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