Having returned from my annual summer holiday that took me across the heat-parched landscapes of western Europe, it feels like I have been cheated for the summer lull. As last month’s asset class returns table above shows, July turned out to be a decent month for most investors despite all the dark clouds on the economic horizon, be they trade wars, looming Brexit headwinds or Emerging Market stress from US$ strength.
As the summer heat wave made way across much of northern Europe, all the above appear to suddenly have returned to the attention of market participants. It is also bolstered by some additional ones, like the resumption of US sanctions on Iran and a fast deteriorating outlook for the Turkish economy as the Turkish Lira entered a tail-spin as the result of US sanctions. The only bit of adverse news that cannot be blamed on Donald Trump’s unorthodox political style was the return of hard Brexit fears.