Market Commentary June 2017
04 July 2017
The snap General Election has delivered a hung parliament, which has resulted in a coalition between the Conservatives and the DUP. The election outcome has had a negligible impact on markets.
Despite inflation rising to 2.9%, The Bank of England held the base rate of interest at 0.25%. Interestingly, the minutes of the meeting showed that three of the eight committee members voted to increase the rate. Subsequent interviews with Mark Carney and Andrew Haldane have suggested that a rate rise may be on the cards in the near future. As a result Sterling has strengthened against the Green Back, which in turn led the market down.
In the US, the Federal Reserve increased the base rate of interest to a range of 1% to 1.25%, the second increase this year. There is a strong possibility that rates will be increased further as the year progresses.
Oil has fallen in June as Nigeria and Libya continue to increase their output. In addition, inventories globally appear to be increasing which forced the price down to an intra month low of US$44.82. Since the reaching highs of US$57.10 in January, oil has fallen over 15%.
| 30 June 2017 | 1 month | 6 months | 12 months | |
| FTSE 100 | 7,312.72 | -2.76% | 2.38% | 12.43% |
| GBP/USD | 1.2994 | 0.74% | 5.32% | -1.95% |
| GBP/EUR | 1.1387 | -0.81% | -2.58% | -4.83% |
| Brent Crude (US$) | 47.92 | -4.75% | -15.66% | -3.54% |
| Gold (US$ per oz) | 1,241.61 | -2.15% | 8.20% | -6.07% |
Sources
www.xe.com
www.bloomberg.com
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