23rd January 2017
Politics dominated global markets this week.
The FTSE-100 reversed most of this year’s gains during the week after the pound strengthened following Theresa May’s Brexit speech on Tuesday – recording its biggest weekly fall (in points) since early November.
The pound was also boosted after Donald Trump, ahead of his inauguration, said that the value of the US dollar was too high. The dollar also weakened after Janet Yellen, the Chair of the US Federal Reserve Bank (Fed), said that the Fed wasn’t behind the curve in containing inflation pressures, despite being close to achieving its goals of full employment as wage growth has slowed and was unlikely to pick up markedly in the near term.
Elsewhere, the European Central Bank (ECB) left both interest rates and its QE program unchanged, while Mario Draghi, the President of the ECB, confirmed that interest rates would stay low.
Looking ahead, PMI (Purchase Managers’ Index) and GDP data are among the main highlights. In the UK, economists predict 0.5% growth in the UK’s economy during the final quarter of 2016 – although down slightly on the 0.6% expansion in both the second and third quarters, it provides more evidence of the continued resilience following the Brexit vote on 23 June 2016.
Ian Copelin, Investment Management Expert*
*Ian Copelin is an Investment Director at Wealth at Work Limited which is a member of the Wealth at Work group of companies