With every data point, the strength and breadth of 2017’s global economic acceleration is confirmed. Truly, a synchronised expansion is in progress with considerable momentum. However, financial markets do not necessarily move in lock step with fundamentals and, of course, nothing lasts forever. Last week there were large divergences at the sector and country level, with global equities falling in aggregate. Indeed, we are in a period with considerable news flow and event risk – and (from a purely tactical standpoint) there are some signs of fatigue.
This coming week, corporate earnings season continues, the Bank of England is expected to raise rates (with the BOJ and FED also holding meetings), Republicans in the US are likely to reveal their tax reform bill, it is rumoured there will be the first arrests linked to Robert Mueller’s Russian vote rigging inquiry (prompting a string of tweets from the POTUS yesterday) and Donald Trump may announce the new chairperson of the FED. Events in Catalonia will also be in focus.
Brent Crude oil traded above USD 60 for the first time in 2 years on Friday.
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