Good morning,

 

Stocks snapped a losing streak last week to provide some relief for investors. The ECB raised rates as expected on Wednesday, whilst the news flow from Thursday onwards very much focused on the death of Queen Elizabeth II. Throughout 2022 there has undoubtedly been a renewed focus on macroeconomics and the economic cycle. Supportive central banks (read loose monetary policy) and excess liquidity (‘excess’ with the benefit of hindsight…), and a series of idiosyncratic events (Brexit, Trump election, COVID) meant that markets arguably did not require such a focus for much of the period since the Financial Crisis.

 

However, the pendulum has very much swung the other way as releases such as the Federal Reserve’s Beige Book garner attention once again. Released eight times a year it attempts to offer insights across the various sub-regions within the Federal Reserve. To summarise the latest release, the consensus is that the economy did not weaken materially over the summer and the labour market remains tight. This will embolden (as did some releases detailed below) those of the view that the Fed can manage to curtail inflation and yet avoid the recession. This has not happened much in history, but you could argue the causes of the current economic backdrop are unique also. However, currently ultimately no one knows. As multi-asset investors we maintain our discipline and consistent approach; with the ability to be active and flexible a key advantage as we move towards the last quarter of this volatile year.

 

Finally, we look forward to hosting a webinar tomorrow on Sustainability Regulation, in conjunction with Brokers Ireland. We’ll guide brokers through the practical implications of the recent changes and be on hand to answer any questions. You can register here.

 

If you have any questions, please do get in touch.

 

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