In an investment world that appears to be dominated by volatility, it feels strange to note that the main headlines last week are very much the same as prior ones – the US election, the sterling post BREX-wish-we-could-reverse-IT, China’s Renminbi (CNY) and associated currencies, and Philippines President Rodrigo Duterte.
With regard to the US election, Clinton extended her lead and appeared to be a clear favourite to lead the US for the next term, until of course the email scandal reared its ugly binary head again. The FBI director announcement over the weekend was ill-timed at best, and at worst, possibly intentional if viewed with a conspiratorial hat on.
The British pound has been another focus area over the weeks. The comments last week by a leading UK government lawyer suggesting that the courts might likely determine that BREX-wish-we-could-reverse-IT would require a parliamentary review before invoking article 50, had excited the “stayers” – their hopes were subsequently dashed when the courts decided a parliamentary review was not required. The sterling struggled last week and threatened to continue sliding into unchartered lows.
The CNY weakness has been a general concern despite solid macro releases in September – it further weakened against the USD to 6-year lows, while USD gained against most currencies to an eight-month high.
In the emerging markets, Thailand is in mourning and trying to come to terms with the King Bhumibol Adulyadej’s death. Concerns over Duterte’s pivot to China away from the US and doubts over Brazil’s fiscal consolidation, wrapped up last week’s material events.