Pegasus Capital

Blog With Tag oecd

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A View from the Bridge - November 2016

Like the harbingers of doom that appeared before the Brexit vote, the “experts” were adamant that a Trump victory in the US Presidential race would result in financial meltdown. Those predictions could not have been further from the truth as the 3 major US stock market indices reached record highs, the USD strengthened to a 15 year high and capital poured into the US in expectation of further stimulus and a pro-growth agenda. Even the OECD has backed the proposed infrastructure spending plans but also warned that protectionist policies and trade disputes could threaten world growth. The Fed kept interest rates unchanged in November but gave a strong signal that moves were imminent and certainly the Fed futures index sees a December rate rise as pretty much a done deal. With GDP being revised upwards to 3.2% on an annualized basis there is also the economic impetus to raise rates.

PegasusCapital - Thu 1st Dec

A View from the Bridge - Sep 2016

So the US is back to winning ways in the sporting world but the outlook for the economy is not quite as clear cut. The US consumer is clearly not spending as much as they have been, which is reflected not only in a slump in imports but also a drop off in car sales by between 5 and 9% and pending home sales falling to a 7 month low. Productivity has fallen for a 3rd month in a row and manufacturing experienced a sharp fall in August so it’s no wonder that the Fed reserved judgement on a rate rise until further data is available towards the end of the year and probably after the election.

PegasusCapital - Mon 3rd Oct

A View from the Bridge - April 2016

Nine months ago the odds being offered on Leicester City winning the Premier League were identical to the quoted odds on Elvis Presley being found alive this year and twice as long as the 2,500-1 odds offered on Eddie “The Eagle” Edwards winning ski-jumping gold at the 1988 Winter Olympics. Clearly the bookmakers will now have to recalibrate their “risk adjusted return” models to take into account those complete outliers just in case they do come true!

PegasusCapital - Tue 3rd May

A View from the Bridge - October 2015

65% of economists from leading banks and financial institutions around the world expect the US to raise interest rates in December and the Federal Reserve after its October meeting signalled as much to the markets. However, with inflation still below target, GDP growth slowing to 1.5% in Q3, exports dropping 2% because of the stronger dollar and not as many jobs being created in September, there are reasons for caution. That said, US retail spending was up 3.2% in Q3 and sales of existing houses jumped 4.7% in September so there could be a need to dampen domestic demand.

PegasusCapital - Mon 2nd Nov

A View from the Bridge - March 2015

It’s happening all over the world from Japan to the US to the UK, official inflation has reached 0% on an annualised basis. The only exception has been the Eurozone where inflation is still in negative territory at -0.3% however, this should edge up over the coming months as the effects of the Quantative Easing programme from the ECB kick in.

PegasusCapital - Wed 1st Apr

£ LIBOR spreads to implied BOE rate close in on 2016 high

£ LIBOR spreads widening on Brexit/Global uncertainty

PegasusCapital - Thu 6th Dec