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Ascencia Investment Management: Weekly Investment Update

Global News

Bank of England – The Bank of England (BoE) Governor, Mark Carney, announced that the Monetary policy committee voted unanimously to kept interest rates at 0.75%, which was widely expected. The BoE also forecast that the UK’s economy has a one in three chance of shrinking in annual terms in the first quarter of 2020, even without a disorderly Brexit. US

Federal Reserve – The Federal Reserve cut interest rates by 0.25% on Wednesday, down to 2.00%. Jerome Powell, the Chairman of the Federal Reserve, cited US trade tensions, signs of global growth slowdown, and a need to boost low inflation for the cut. The rate cut was widely expected by markets, however, as Mr Powell did not lay out his plan on future rate cuts clearly, equity markets reacted negatively. US President Donald Trump also had a negative opinion of the announcement, stating on Twitter that the Fed chairman “let us down” by not implying that an aggressive stance to monetary easing was coming.

US-China trade talks – After a two day meeting in Shanghai, US trade representatives came away with no sign of a breakthrough in the latest round of trade talks. As a consequence of this, and claims that China are not living up to their promise of buying more US agricultural products form the US, President Trump has stated that the US will now impose a new 10% tariff on yet another $300bn of Chinese goods beginning in September, further escalating tensions between the two countries. This sent a shockwave through financial markets, with investors flocking to safe haven assets.

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.