Too Early for a New Dawn in the UK

The UK’s successful vaccination programme has fuelled speculation of a rapid recovery. However, barriers to post- Brexit trade and a slow easing of lockdown restrictions pose serious risks. It is premature to suggest UK underperfomance is over After a wobbly start to...

Stay Cautious on UK Stocks

UK equity valuations are among the lowest in DM, but caution is still warranted. We wait for an upturn in our LEI before considering longs in UK domestic stocks UK-specific risks subsided sharply following the conclusion of a bilateral trade deal with the EU at the...

UK optimism has room to run

Weak sentiment and rising leading indicators combined with a supportive central bank is the best combination for asset markets. Sentiment towards the UK has been dismal, but with the ruling Conservative party’s much larger than expected victory at the General...

Foreigners’ Confidence in UK Remains

The politics of Brexit have enveloped the UK, and have negatively affected UK growth. However, as recent current-account data shows, things are less bad than originally feared. The top-left chart shows that net investment into the UK has continued to rise. The total...

UK Housing Market Close to Bottom

The UK’s love affair with housing isn’t over, but it has certainly cooled of late. A combination of increased stamp duty on second homes, fewer tax breaks for buy-to-let landlords, and the uncertainty surrounding Brexit have all served to take some of the froth out of...

Long GBPUSD: Short Squeeze and April Seasonality

(from our Weekly report of 4th April 2017) GBPUSD remains range bound, with the triggering of Article 50 last week widely expected by the market. Since the Brexit vote, speculative positioning on GBP has been persistently very bearish; however, the latest Commitment...

Negative Feedback Loop in Europe

While most of the attention post-Brexit has been on the UK, we are far more concerned about Europe.  Markets and the economy operate in a feedback loop, and the performance of European banks relative to the stock market points to a fall in lending ahead in Europe. ...