Knowledge and Insight - Politics

Ever since Prime Minister Shinzo Abe came to power in 2012, bringing with him his ambitious “three arrows of reform”, investors have faced the question of when — or whether — to increase their exposure to Japan. Has the moment finally arrived or are there still clouds on the horizon in the Land of the Rising Sun?

The history of currency unions can tell us much about the outlook for the euro.

Ed Smith, Rathbones asset allocation strategist, spoke at ‘Brexit and 100 days of Trump’, an event in our Liverpool office on 3 May. Here is a summary of Eds presentation.

The world is experiencing a period of rising inflation. A rebound in oil prices has helped after dragging down UK consumer price inflation into negative territory briefly in the second half of 2015. Improving wage rates in China, which in the past had been an exporter of global disinflation, have also contributed.

Early last year, investors were preoccupied with fears about the pace of China's economic slowdown and the threat of deflation. Just 12 months later, and almost 10 years since the start of the financial crisis, a global economic upturn appears to be under way across the US, Europe, Asia and most large developing countries.

Stock markets continue to take an optimistic view of the risks to future earnings, but we remain gently cautious and note that there are plenty of reasons not to be complacent.

The probability of a hard Brexit is very much higher now than it was immediately after the referendum, despite a rumoured eleventh hour softening of May's tone ahead of Wednesday's invocation of Article 50.

Keeping his promise to position all major announcements in the autumn so there is sufficient time to implement any changes, the Chancellor tinkered rather than tackled in Wednesday’s Budget. But he also hinted at wider reforms to come.

The machinations of central banks were once conducted in near-anonymity and of interest only to a small band of finance specialists. Now they are both political and highly public. With ultra-low interest rates representative of the “new normal”, what are the chances of a return to the low-key status quo that endured for so long?