At last, there has been some movement on interest rates. The engines have been revving for some time, but first off the starting grid this week has been the Bank of Canada (BoC) – the first member of the G7 to cut rates.
This was followed yesterday by the European Central Bank (ECB) which also joined the party. The question now is will the Bank of England follow suit? Certainly not until after the election.
Interestingly, I’m hearing that some estate agents are telling clients not to put their properties on the market until after the 4th July when it’s absolutely clear who will be running the country, and in a month when they expect UK interest rates to be cut. The latter move is far from certain but let’s hope this transpires.
Inevitably, election fever is building, although after the first live debate this week, I expect viewing figures to plummet. Very uninspiring!
It’s not expected that there will be a coalition in the UK, although this will be the Tories only hope of getting in power, surely? Investment markets don’t like uncertainty and prefer to know exactly what they are dealing with. Evidence of this has been played out this week when, despite encouraging data from exit polls, Modi’s Indian party failed to grab a sufficient majority, and had to bow to other marginal political parties to form a coalition government. The markets didn’t like it one bit, but have shown a partial recovery since the news broke on Tuesday.
On this week’s agenda
- Interest rates fall
- Modi is forced to form a coalition
- Indian markets in turmoil
- Will the UK election have any adverse impacts on markets?
- The most exciting development since wifi
- Nvidia worth more than Apple!
- Summary
Interest rates fall
Canada
First to break cover this week was the BoC who reduced rates by 0.25% becoming the first of the G7 to reduce rates after their aggressive hiking throughout 2022 and 2023.
A spokesperson for the bank said it is increasingly confident that inflation is moving closer to its 2% target, whilst suggesting more rate cuts could be around the corner should inflation continue to slow.
Continues…
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