Markets to remain on edge ahead of UK wages data

Markets to remain on edge ahead of UK wages data

Investors have had plenty of time to absorb the various headwinds that have come their way over the course of the last few years, and on each occasion any dips in equity markets have tended to get bought into. Whether it be concerns about political instability in Europe, quantitative tightening, a slowdown in China, the UK Brexit vote, Donald Trump becoming US President, and North Korea firing off missiles over Japan, markets have proved to be fairly resilient. In recent weeks this resilience has started to be tested in ways that are slowly becoming apparent in other asset classes, with flows into safe havens showing signs of gathering pace. The rise in gold prices to record highs against a host of different currencies, with the exception of the US dollar, as well as the sharp collapse in bond yields is raising concerns that stock markets may well be about to take a sharp trip back to the lows last seen at the end of last year. On their own, concerns about US, China trade, slowing growth, and the risk of recession in Europe’s biggest economy, Brexit, the possibility of Italian elections, unrest in Hong Kong, as well as a crisis in Argentina, and tensions in the Arabian Gulf might be containable. Taken together in the round as a cocktail of risks against a backdrop of central banks almost out of ammunition and you have a recipe for a lot of nervous investors. US yields in particular took a sharp […]

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