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What’s affecting your investments? June 2018

Alex Neilson, Zoe Bancroft and Guy Ellison discuss how global trade discussions are changing the investment landscape

Topic: Investing

In this month’s 60 Second Market Update we summarise the key events shaping the global economy. Our Investment Manager Alex Neilson then talks to our Head of Equities Guy Ellison and Investment Manager Zoe Bancroft about each of these themes in more detail. Subscribe to our newsletter to receive regular monthly updates.

Video Transcription

Last week saw G7 leaders meet in Quebec and the main theme was trade:

Trumps Trade Tariffs

Canada and The EU responded to Donald Trump’s decision to introduce tariffs on steel and aluminium by proposing tariffs on US imports. Increased global trade has typically been good for consumers and investors as it lowers prices and inflation, while generating higher profits. So any subsequent tit-for-tat trade dispute could have a huge impact on global markets and investments.

Strong Dollar

Trump’s attempts to support US trade have been impacted by the strengthening dollar. A strong dollar is a headwind for US exports, as it makes products and services more expensive for overseas buyers. Emerging Market investments have also taken a hit, as these tend to be heavily influenced by a strong dollar.

Italian Coalition

The fear of trade wars has impacted European markets, particularly car manufacturers. Europe was already on the back foot following a drawn-out coalition agreement between two anti-establishment parties in Italy, which has caused uncertainty about the implications for the EU. We still believe that Europe’s recovery is moving forward - albeit slower than other parts of the world.

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