It's A Perverse World Where Stocks Rally On "The US vs The Rest Of The World"

BoE's Grand Plan, ESG and Air France calling Macron's Bluff

Its Bank of England day tomorrow and you just got to wonder if it’s all going according to Mark Carney’s Grand Plan. Since his mumble-swerve on rate hikes because of weaker economic data 3 weeks ago – which prompted lots of hair pulling, unreliable boyfriend comments, and bafflement on what the BOE can do - the pound has crashed through the floor versus the dollar and wobbled badly on the Euro. Well done Mr Carney – it’s the most effective way to keep the currency down and the UK competitive!

While the UK is already in enough trouble from the Tories ability to turn a simple goodbye Europe into a Brexit political clusterf**k of monumental proportions.. (OK, I’m being flippant, but Brexit really doesn’t matter….) what’s not to like about weaker sterling – unless you were planning a holiday abroad? In the absence of any monetary policy tools left in the box – cos you can’t cut rates when they’ve already been cut to nada (unless you are Japan or Switzerland, and the UK clearly is not) - then currency games are the only way.

So get over the “disappointment” of no hike tomorrow and get on with it.. Although, its worth wondering what it means for the UK’s place in this “Macro Aligned Synchronised Global Recovery..” Or is it another sign the global recovery is stalling…? (More than a few of my clients will call and ask “what economic recovery???”) – One day they may erect a monument to central banks and carve into it: “They created a desert and called it peace…”

Elsewhere, it’s a perverse world where stocks rally on the US versus the rest of the World re Iran. Its’ certainly bad news for the Iranians – the Yooropeens and Theresa Might can bleat about it being unfair, but no sane investor or rational business is going to risk a single penny on Iran. The ESG implications are just too painful to contemplate…

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