September 08, 2017

ECB maintains status quo pending the October meeting.

Management comment

Harvey, Irma, successive cyclones unfortunately wreak the same havoc on the landscape.

Their economic impact, particularly in the US where Florida is expected to be hit again, will not be negligible however and a wide range of industries will be affected, although the dynamic US and global momentum is not expected to be hampered. Global synchronised expansion across the board is a rare enough event to merit highlighting. As expected, the ECB did not modify its asset purchase programme. It is expected to do so at its October meeting and finally succeed in (marginally) raising interest rates. The current monetary environment continues to promote M&A deals which enliven the market (Schneider/Aveva and UTC/Rockwell Collins). After a preceding disappointing week, capital flowed back into Europe despite fears of a Catalonian independence referendum. This latest episode will provide a tenuous excuse for certain scaremonger investors in the eurozone. In reality, under the Spanish 1978 constitution, no region has the legal right to organise independence and its own autonomy.

Donald Trump, whose theatrical communication methods and outbursts are difficult to decipher regarding domestic and international issues (North Korea), has at last secured support (from the Democrats!) to raise the debt ceiling over the next three months. The permanent playacting by the US president reminds us of a famous exchange in 1988 between the journalist David Brinkley and Ronald Reagan at the end of his tenure. In response to the question “has your former experience as an actor helped you in your role as president?”, Ronald Reagan allegedly replied with the relatively pragmatic following comment: “There have been times in this office when I have wondered how you could do the job if you had not been actor”. History will judge whether Ronald or Donald played the most convincing role.

Igor de Maack, Fund manager and spokesperson at DNCA.  This report was finalised in September 8th, 2017

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Harvey, Irma, successive cyclones unfortunately wreak the same havoc on the landscape. Their economic impact, particularly in the US where Florida is expected to be hit again, will not be negligible however and a wide range of industries will be affected, although the dynamic US and global momentum is not expected to be hampered. Global...
2017-09-08