Our Views on the Markets and the Economy

Looking Down from the Mountain Tops: Davos

This week is the annual meeting of the World Economic Forum (WEF) in Davos.

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Where is the Consensus?

The first few days of the year provide a good opportunity to gauge the mood of the markets and assess where consensus thinking is about the economic and financial outlook and the big issues for the year ahead.

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Views on 2017

2016 was full of political surprises. 2017 may be the year of economic surprises. The UK and world economy could surprise on the upside. Perhaps not by much, but by enough to matter and for investors to notice. There is, after all, considerable uncertainty about what lies ahead.

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Diverging Trends: On Optimism and Rates

Politics is never far from the top of investors' minds nowadays. After Brexit and Trump we are at the start of a long series of political battles in Continental Europe: now with Italy and Austria, then The Netherlands in the spring and culminating in the French and German elections next year.

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Rising longevity and low interest rates are stirring up a perfect storm for investors – but a few smart decisions could generate a sustainable income for an extra 10 years or more in later life.

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Trump and the TPP

The beginning of this week has seen a significant announcement in the US that adds to the present policy debate, with investment implications. This is the comment made on Monday by President Elect Trump that on the first day in office he would sign an executive order withdrawing the USA from the Trans Pacific Partnership (TPP) between the US and eleven Pacific Rim economies.

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Bond Markets: Lessons from the US

In the wake of the victory of Donald Trump, financial markets have reacted strongly. As we touched on last week, the focus is on the possibility of a reflationary boost to the US economy, helping growth and raising inflation. As a result, US equity markets have rallied strongly and the dollar is very firm.

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Trump: The Economics

Don't panic. That is the first message for investors. After all that has been said in recent months, it would not be a surprise if some investors were concerned following Donald Trump's election as President. However, an equally important message might be to take a positive view of what might lie ahead for US economic policy.

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So what type of economy will the US President inherit? The outlook for the US economy matters for us all, given its importance as the world's largest economy. Moreover, the future direction of both US interest rates and the dollar will have global significance.

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Tuesday 8th November will see US citizens take to the polls to elect the 45th President of the United States of America - an event that potentially could have a significant market impact. Nevertheless, based on our assessment of the balance of risks and current polls, we feel that current positioning is appropriate as we approach election day.

Media coverage of the political jousting concerning personalities and several key electoral topics that has occurred over the past few months has been abundant, yet focus on key policies has been thin to say the least. The table below summarises key policies for each candidate that we think will have a tangible impact on financial assets, and hence clients' portfolio performance.

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