Monetary policy

According to Aninda Mitra, senior sovereign analyst at Standish Mellon Asset Management, the International Monetary Fund’s in-principle acceptance of the CNY in the SDR basket is, in our view, an important step in cementing the process of greater medium-term capital account openness. However, it is unlikely to result in large near-term capital inflows.

According to Paul Markham, global equities portfolio manager at Newton Investment Management, for an overall outlook on equities, it’s too early to tell whether a bad start to the year can be a sign that 2016 will be problematic. However it is true that leadership of markets in recent months has been narrow with a number of large cap stocks leading the way.

After a year of talking about it we finally got it. The Fed starts hiking rates for the first time in more than 9 years. It has been long anticipated, so one has to wonder what it will actually mean if everybody had so much time to prepare for it. Probably not too much actually.

As yet, sterling appears not to have reacted to the looming referendum on the UK’s continued membership of the European Union. Over the short to medium term, however, the currency should end up reacting negatively, so great is the fallout for the British economy. In particular, one would expect the volatility displayed by sterling to pick up at the start of 2016, bearing in mind that opinion polls are very tight...

Since the 2008 crisis, central banks have had a major influence on financial market trends. The Bank of Japan (BoJ) in particular has orchestrated a historic rally among Japanese equity markets since announcing its quantitative and qualitative easing strategy (QQE) at the end of 2012.