While the resumption of trade talks appears to mitigate any near-term deterioration in US-China tensions, the prudent investor will not get carried away, seeing as a meaningful deal still seems a long way off at this point in time. Global growth has already been stifled by the protracted impasse between the world’s two largest economies, along with the imposed tariffs, and investors need not look further than the IMF’s repeated downgrades to its global growth forecasts. While the prospects of central bank stimulus encourage risk appetite for equities, some measure of caution is still warranted, given the downside risks stemming from global trade tensions and Brexit uncertainties.
New Prime Minister, same old Sterling
The Pound offered scarce reaction to Boris Johnson’s official unveiling as the new leader of the UK Conservative Party, with such an outcome having already been priced into the markets. Theresa May is set to hand over her duties as Prime Minister to Johnson later today, and with it, the same political challenges that proved insurmountable for May in getting Brexit over the line.