Investment Markets Overview — W/E 17th June 2016

Due to travelling commitments this is a shorter version of the usual investment markets overview.

It was another turbulent week for the markets, in the main blamed on the lead-up to the UK’s Brexit referendum which is now less than a week away, whereas in reality most of the market volatility of late can be placed fairly and squarely at the hands of the World’s leading central banks’, whose increased market intervention and manipulation, or attempts at it, make the commercial banks criminal activities such as the Libor and FX scandals look “small fry.” In fact, the level of market intervention post 2007/09 financial crisis, is fast approaching “command economy” status as opposed to what are supposed to be “free markets” the necessary central constituent of a capitalist society.

Despite a pause in the UK referendum campaigning, following the tragic and senseless death of Jo Cox MP, the IMF and the Bank of England “experts” saw fit to wheel out a further scare warnings on an exit vote, including a substantial blow to UK economic growth; a sharply lower pound and shockwaves through the global economy. Meanwhile, our “Socionomic” input, via recent blog comment, have factually demonstrated that it is the collective social mood, as identified by a nation’s main stock-index, that leads economic growth, up and/or down, whilst also identifying a tendency for polarised societies including politics during falling collective mood swings. As such, instead of listening to “experts Lagarde and Carney” telling us what happened via the rear-view mirror, we prefer to let the charts do the talking in respect of forecasting matters such as economic growth and the odds of a remain or leave event such as Brexit:

17 June 16

Why are we not surprised that UK GDP is falling, the leave camp have nudged ahead in the polls and at least eight other EU electorates are demanding a referendum also.

The main economic events of the week included unchanged monetary policy from the FOMC, the Bank of Japan, Switzerland and the Bank of England, with the latest on inflation for these key economies remaining way below their stated target rates and closer to zero or already in outright de-flation, albeit that there were some positive surprises on US retail sales, UK average wages and EU new car registrations.

The FX markets saw a weaker $US index, a stronger Yen with the British Pound also stronger by 0.7% Ms Legarde. Sovereign bond yields were mixed, with yields rising in Japan and the PIIGS, whilst lower for the UK, Germany and the United States.

 

Commodities were also mixed, with the Oil price unchanged at $48.8 a barrel, the CRB easing by 0.3%, with Copper rising by 0.3%. The precious metals saw $Gold higher by 2%, at $1302, $Silver rising by 1.1% to $17.5oz, whilst in the paper market, the North American XAU gold-share index remained unchanged on the week.

Global stocks took a hit, with the main US and European indices lower by a respective 1.2% and 2.1% and Asia X Japan and the Nikkei fairing worse, at -2.9% and -6%:

17 June 16 2

Economic data due for release next week includes more on housing for the US and the UK, with the former updating on consumer sentiment and the latter on its public finances. Japan updates on PPI, trade and retail sales, whilst the Euro-Zone announces its latest PMI readings and the June ZEW economic survey. The main event of course will be the UK referendum on continued EU membership, or not.

“If you don’t vote, you get the government you deserve, and if you do, you never quite get the results you expected.

Click Here to view Details of the full version of this Newsletter which includes full text and detailed

 

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