Equity markets have recovered much of their losses in recent weeks and, after hitting multi-year lows at the start of September, sterling and bond yields have also rebounded. (See Chart 1.) This is partly due to signs of a temporary détente in the US-China trade war and partly due to Parliament passing legislation which makes a no deal Brexit on 31st October much less likely. However, we doubt it will be long before concerns around the trade war reignite which, combined with a further slowdown in US GDP growth, is likely to drag global and UK equity prices lower later this year. And unless there is a Brexit deal, which still looks challenging, we doubt that there is much more upside for bond yields and sterling in the near term.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services