Market Update: UK assets rally as chances of a brexit deal improve


Posted 17 October 2019 | Investments – Periodic Updates

Share

Share on Twitter Share on Facebook Share on Linkedin

The value of investments and any income from them can fall as well as rise. You may not get back the amount originally invested.

Key Takaways:

Brexit: Possible breakthrough on Irish border

• UK shares rallied and sterling strengthened against the US dollar as the prospects of a last-minute Brexit deal improved;
• The Prime Minister and his Irish counterpart said they could see ‘a pathway to a deal’ after meeting on Thursday, and the EU agreed to hold intensive talks with the UK over the weekend;
• Meanwhile, the UK economy grew by 0.3% in the three months to August, up from 0.1% in the three months to July*.

Omnis view: The chances of the two sides agreeing a deal seem to have improved following the UK’s concessions over the contentious issue of the Irish border. However, it remains to be seen if Parliament will back whatever deal Boris reaches with the EU.

Trade: Latest US- China talks lead to limited deal

• Global shares rallied after US President Donald Trump and Chinese vice-premier Liu He agreed a limited trade deal;
• The US put a hold on tariffs- taxes on companies importing products from abroad- on US$250 billion of Chinese goods due to come into effect next week, and China promised to increase purchases of US agricultural products.

Omnis view: While the markets welcomed some respite from trade tensions, this deal falls short of what President Trump pledged on the campaign trail, so there may be more uncertainty ahead.

Europe: Mixed week for German industrial data

• Economic data showing slowing activity in Germany’s industrial sector in August and September weighed on the country’s shares, but they moved higher after industrial production unexpectedly rose in August.

Omnis view: The export-heavy German economy is considered the engine of the EU so a slowdown is bad news for the region as a whole.

Emerging markets: Turkish forces enter Northern Syria

• The Turkish lira fell against the US dollar after Turkey’s armed forces launched an operation in Northern Syria to establish what the country’s president called a ‘safe zone’.

Omnis view: Turkey’s actions, which have been widely criticised, are contained at present and should not affect other
emerging markets. 

LOOKING AHEAD - TALKING POINTS

Economic data (NB all regions)

• Tuesday- UK unemployment rate in August;
• Wednesday- UK inflation rate in September; EU inflation rate in September;
• Friday- Japanese inflation rate in September, Chinese economic growth in the third quarter of 2019. 

*https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpmonthlyestimateuk/august2019

Omnis Investments is now tweeting daily updates. Follow us at: @OmnisInvest

This update reflects Omnis’ view at the time of writing and is subject to change.

The document is for informational purposes only and is not investment advice. We recommend you discuss any investment decisions with your Openwork financial adviser. Omnis is unable to provide investment advice. Every effort is made to ensure the accuracy of the information but no assurance or warranties are given.

The Omnis Managed Investments ICVC and the Omnis Portfolio Investments ICVC are authorised Investment Companies with Variable Capital. The authorised corporate director of the Omnis Managed Investments ICVC and the Omnis Portfolio Investments ICVC is Omnis Investments Limited (Registered Address: Washington House, Lydiard Fields, Swindon, SN5 8UB) which is authorised and regulated by the Financial Conduct Authority. Omnis Investments Limited does not offer investment advice nor make recommendations regarding investments. Potential investors are particularly advised to read the specific risks and charges applicable to the Funds which are contained in the Prospectus and Key Investor Information Documents (KIIDs).

Omnis Investments Limited is registered in England and Wales under registration number 06582314 (Registered Office: Washington House, Lydiard Fields, Swindon SN5 8UB). 

Our website uses cookies, by using our website you consent to our cookie policy. Learn more