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D-PIMS Weekly Market Update - Week of 14th to 20th September 2020

Today’s Monday Update:

Over the course of last week, Brexit continued to feature highly, amongst the ongoing Coronavirus and economic developments:

• The British drugmaker AstraZeneca, received the go-ahead from safety watchdogs over the weekend to resume clinical trials for its COVID-19 vaccine candidate in the United Kingdom. The resumption of the trials for the vaccine, one of the most advanced in development and regarded by governments and financial markets as one of the best bets to tackle the health crisis in the months ahead, buoyed stock markets around the world.

Several European countries have started testing a technology platform that will allow national coronavirus tracing apps to ‘talk’ to one another to better tackle the pandemic, the European Commission said on Monday.

There are not that many outstanding issues in the way of securing a “thin” free-trade deal between the European Union and Britain, which is the best-case scenario at this stage, Irish Foreign Minister Simon Coveney said on Monday. “We need to also focus on how do we get this deal done... to deal with the outstanding issues. There aren’t many of them. There are a few that are needed in terms of getting a basic and thin free-trade (deal), which is all that is possible at this stage to avoid tariffs and quotas,” Coveney said in an interview with Newstalk Radio.

• The World Trade Organization ruled on Tuesday that additional tariffs imposed by the United States against China in 2018 were inconsistent with global trading rules.

• A hefty drop in meal prices, spurred by the ‘Eat Out to Help Out’ scheme to support the hospitality sector through the COVID-19 pandemic, helped to push inflation down last month to its lowest rate in almost five years. Consumer prices rose by 0.2% in annual terms in August, the smallest increase since December 2015 and a sharp slowdown from July’s 1.0% increase, the Office for National Statistics (ONS) said on Wednesday.

Britain offered tentative concessions on fisheries in trade talks with the European Union in the last week, two diplomatic sources told Reuters, just as London was publicly threatening to breach the terms of its divorce deal with the bloc. They said it also suggested London might still be open to clinching an agreement despite a crisis in Brexit talks over Britain’s Internal Market bill.

The US Federal Reserve sent out “strong, powerful guidance” on Wednesday, as it predicted interest rates would stay near zero until at least the end of 2023. Further, the central bank said it would not tighten policy until inflation has been "moderately above" above 2% "for some time", as it looked to put in place its new inflation-targeting framework.

• On Thursday, the European Union’s Brexit (Michel Barnier)negotiator told the bloc’s 27 national envoys to Brussels that he still hoped a trade deal with Britain was possible, stressing that the coming days would be decisive, three diplomatic sources told Reuters.

• Figures out on Friday, showed British shoppers continued to increase spending last month, taking sales further above pre-COVID levels, as strong online demand helped much of the sector enjoy a faster rebound than the rest of the economy. Retail sales had already overtaken pre-COVID levels in July and now stand 4.0% higher than before the crisis.

• Over the week, the main Global Stockmarket where mixed with some up and some down. However, after taking the £’s appreciation into account, overseas markets were mainly negative. The investment D-PIMS Portfolios were mostly flat to slightly up. The Portfolios were generally helped by their diverse exposure.

 

The value of investments and the income from them can fall as well as rise and you may not get back the original amount you invested.

Past Performance is no guarantee of, or guide to future returns.

The comments made above represent our interpretation of events and market views and are in no way a guarantee of future investment performance.
 

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