Jul 14, 2017 | Investment Advice

International News (Issue 457) – July 14th, 2017

The Federal Reserve Chairwoman’s commentary around both the balance sheet unwind intended by the Fed, and indeed the outlook for inflation, seemed to garner most attention from markets this week.

As I detailed in the previous section, I was surprised at the markets optimistic reaction to Janet Yellen’s mildly dovish inflationary outlook particularly given that this was currently priced in by fixed income markets.

That the Fed balance sheet would not be used as an ‘active tool’ for policy was also interesting, and points to a sustained withdrawal of liquidity from global investment markets.

The Bank of England and European Central Bank look to be treading a similar path to the Fed, albeit several months behind.

Rising inflation in the United Kingdom is causing significant disagreement amongst BOE board members as to the timing for not only a withdrawal of its current bond buying program, but also as to plans for the first rate-hike.

Thursday Closing Values

U.S. S&P 500 2448 +38 +1.6
London’s FTSE 7413 +76 +1.0
Japan’s Nikkei 20099 +105 +0.5
Hang Seng 26346 +881 +3.5
China’s Shanghai 3218 +6+0.2



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