Market conditions

Valuations alone do not make or break a market. By weighing prices, momentum, leverage, sentiment and the economic outlook, the evidence points to caution without turning fully defensive. The downside grows far steeper if earnings and valuations both weaken.

June MPC preview

Markets have eased back from their more hawkish bets, but the case for higher rates has not gone away. With inflation still set to climb and oil shaping expectations, the next few months may prove more important than this week's MPC vote.

Risk of recession

From the dotcom bust to the banking crash and the pandemic panic, each major equity market sell-off has had its own spark. That makes risk hard to map with neat labels.

Inflation outlook

The Bank of England still sees a path back to target inflation, but only if the energy shock fades and wage pressures remain constrained. If oil prices stay high and second-round effects take hold, rates could rise far beyond current market pricing.

MPC and FOMC preview

Last week, we saw the first hard data on the inflation impact of the war with Iran on the UK economy, and we heard testimony from the next Fed Chair when he appeared before the Senate Banking Committee.

Market calm

Crude has slipped from its peak, lifting markets, but past shocks have driven far higher prices. With supply risks on one side and weaker demand on the other, oil could swing either way. That even split may explain the calm across risk assets.

Credit spreads

Spreads remain tight with only a modest widening in the year to date. The shift has been a slow grind, not a shock, and equities show the same pace. Markets appear calm, with gloomier outlooks given little weight in prices.

Market conditions

Gilt yields have surged at a breakneck pace, yet the case to shift stance remains weak(ish). Equities have slipped but not enough to offer clear value. With risk signals muted and oil the key swing factor, holding near neutral still looks like the smart move.

March MPC Preview

The Bank of England meets this week amid a dramatic shift in market expectations. Oil prices have surged, rate-cut hopes have evaporated, and gilt yields have jumped sharply. While a March cut now looks unlikely, the case for hikes remains far from clear.