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MT Week 8 News Update

November 16, 2016

What to look out for:

General Macroeconomic/ Markets: Inflation expectations around the world, likelihood of Fed interest-rate hike, investor sentiment and Trump’s policies.

China/ Asia: The impact of the Trump presidency on Asian economies, and the response of the government and central bank

M&A/ ECM/ DCM: The impact of antitrust regulations and the interest in technology acquisitions/ equity offerings

Commodities: Global macroeconomic trends and sentiments on China to drive metals, OPEC talks and Trump presidency to drive oil in the short run

Technology/ Others: Government initiatives and policies to grow Fintech, acquisitions within the technology sector

Politics/ International Relations: Trump’s foreign policy developments

Nikkei 225: Recovering?

October 04, 2016

The Nikkei 225 has been steadily recovering since the start of the week (3 Oct), up 0.83% from Monday and closing at 16,735 (JPY).

How did we get here?

Looking back to 2 weeks ago, we saw the Bank of Japan (BoJ) introduce a new form of quantitative easing in the form of yield curve control, setting a cap on 10-year bond yields at 0% and committing to surpass its 2% inflation target [1]. Theoretically, a credible pledge would cause people to expect an increase in future price levels, and thus lower interest rates in the present, stimulating the economy. Markets reacted positively initially, including the Nikkei index, but poor market sentiment and lack of belief in the BoJ saw markets reverse slightly.

Brexit, what now?

July 09, 2016

Our previous article outlined the global economic shockwaves caused by the Brexit referendum. Now, we turn our eyes to the legal implications of Brexit. We approach primarily from the perspective of the UK government, and the countless decisions it faces ahead.

 

The road to Brexit…

First, it is important to establish that the referendum held on 23rd June 2016 was nothing more than advisory. This means that even after the vote for “Leave” prevailed, nothing changed from a legal perspective. The UK is still currently a member of the European Union (EU) and is still bound under EU law. Before the UK leaves, it must undergo a tenuous process to negotiate its new relationship with the EU as well as trigger the necessary legislation for its formal departure.

Brexit – A One Week Retrospective

July 03, 2016

Brexit needs no introduction. The historic vote was cast by the UK with a margin of 52% to 48% supporting leaving the European Union. It sent shockwaves across the world economy. Global asset markets experienced seismic shifts and volatility hardly seen since the crisis of 2008 and beyond, and central banks worldwide responded swiftly to quell fears from spiralling out of control. The result of the referendum shook the foundations of the EU, and emboldened populist political figures across Europe to clamour for separation. More poignantly, the identity of the United Kingdom lays at risk, with a political vacuum and lack of leadership perpetrating further uncertainty and unease about its future, assuming there is still a United Kingdom after a likely referendum on Scottish independence. Economic confidence and growth will take a serious hit, as large companies, banks and investors mull their options and contemplate an uncertain future in a diminished UK. “Uncertainty” would be the central theme of the months to come. There is little in the way of solid direction and guidance for the myriad stakeholders in this momentous event.

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