Cross-posted from Vimal Gor at BT:
October was a very volatile month as a number of issues jostled for top billing. First we had the preannouncement of the Brexit Article 50 lodging date from the UK, which saw considerable weakness in Sterling and later in the month a flash crash. The UK is being watched eagerly by many commentators as it provides a live case study of both a country leaving the EU and a country switching from monetary to fiscal policy, how well it navigates these waters will determine how many other countries follow. On the back of the UK concerns we had the growing uncertainty around the US election as the political mudslinging stepped up to a new level, this was coupled with new hawkish rhetoric from the Fed who seemed determined to raise rates in December (even though the window for hiking rates closed back in 2014). The key market moves this month were the strength of the USD Dollar which strengthened materially against virtually all currencies (but the most against GBP, SEK and JPY) and the selloff in bonds yields which looks to have been started by Chinese selling as they try to engineer stealth devaluation. All in all lots happened but still volatility remained subdued, am I the only one hoping this ends soon? It was a quiet-ish month on the portfolio with most funds slightly underperforming their respective benchmarks.
An ‘assumption’ of economists…
