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D-PIMS Weekly Market Update - Week of 7th to 13th September 2020

Today’s Monday Update:

Over the course of last week, Brexit news stormed back to headlines, amongst the ongoing Coronavirus developments:

• Brexit trade talks plunged into fresh crisis on Monday after Britain warned the European Union that it could undercut the divorce deal it signed unless the bloc agrees to a free trade deal by 15th October. In one of the most startling turns of the four-year Brexit saga, Britain is planning new legislation to override parts of January’s Brexit Withdrawal Agreement,

However, Britain said on Monday it remained fully committed to implementing the withdrawal agreement it agreed with the European Union, describing proposed changes to be implemented in domestic law as limited clarifications. “We are taking limited and reasonable steps to clarify specific elements of the Northern Ireland Protocol in domestic law, to remove any ambiguity and to ensure the government is always able to deliver on its commitments to the people of Northern Ireland,” a spokesman for Prime Minister Boris Johnson said.

The European Commission said it was determined to quickly reach a deal with Britain on a future economic and trade relationship, but underlined it would have to ensure fair competition.
French President Emmanuel Macron said on Monday that he had enjoyed a “very good exchange” with British Prime Minister Boris Johnson on various topics including Brexit.

• On Tuesday, the Bank of England’s chief economist, Andy Haldane, hailed the recovery so far in Britain’s economy after its coronavirus lockdown shock, striking a more upbeat tone than several of his colleagues recently. Haldane told City A.M. newspaper that the “recovery isn’t being given enough credit, and the economy has bounced back in large part because consumers had shown themselves to be incredibly resilient and adaptive and so too have businesses.” He also told City A.M. that calls to extend the British government’s huge job retention scheme would prevent a “necessary process of adjustment” from taking place in the labour market as some companies looked set to fail. BoE Governor Andrew Bailey has similarly backed finance minister Rishi Sunak’s plan to wind down the job retention scheme by the end of next month.

Britain began a fresh round of Brexit trade talks on Tuesday, by warning the European Union that it was ramping up preparations to leave the bloc without an agreement, as the two sides bicker over rules that govern around £750 billion in trade.

England’s deputy chief medical officer said the sharp rise in the number of coronavirus cases was of great concern and people had “relaxed too much” over the summer. Warning people they would need to follow the guidelines, Jonathan Van-Tam said: “We have got to start taking this very seriously again, if we’re not careful we’re going to have a bumpy ride, people have relaxed too much”.

• On Wednesday, AstraZeneca Plc said it has paused global trials, including large late-stage trials, of its experimental coronavirus vaccine due to an unexplained illness in a study participant. The British drugmaker said it voluntarily paused trials to allow an independent committee to review safety data, and it was working to expedite the review to minimise any potential impact on the trial timeline. Fortunately, this delay turned out to be short lived as the trials were given regulatory approval to recommence over the Weekend.

Prime Minister Boris Johnson announced new restrictions on social gatherings in England on Wednesday, saying there was a clear need to act after a spike in COVID-19 infections. Speaking at a televised news conference, flanked by his top medical advisers, Johnson said groups of more than six people would be banned from meeting, in what he called a "rule of six" that was easier to understand than previous guidance. "I wish that we did not have to take this step, but as your Prime Minister, I must do what is necessary to stop the spread of the virus and to save lives," he said. He added "I will be absolutely clear, this is not, these measures are not, another national lockdown. The whole point is to avoid a second national lockdown".

Britain is planning to train hundreds of data scientists as part of a new strategy to drive an economic recovery after the COVID-19 pandemic, through smarter use of data and technology in policy-making. “The new strategy will put data at the heart of the country’s recovery from the pandemic, so companies and organisations can use it to drive digital transformation, innovate and boost growth across the economy," the government said in a statement.

• Talks on Thursday in London between EU and UK representatives failed to clear the bloc’s concerns about London’s proposed Internal Market Bill, two EU diplomats and an official said.

• Figures out on Friday, showed that Britain’s economy grew for a third month in a row, as pubs, restaurants and other sectors reopened after the coronavirus lockdown, but it remained 11.7 % smaller than its pre-pandemic level. Chancellor, Rishi Sunak welcomed the figures, but added that people were rightly worried about the coming months.

Britain struck its first post-Brexit trade deal with Japan on Friday, hailing the agreement as a “historic moment”. The deal, which had been agreed in principle, meant 99% of its exports to Japan would be tariff-free and would increase trade with Japan by an estimated £15.2 billion a year, Britain’s trade department said. Digital and data provisions in the agreement went “far beyond” those in the EU’s trade deal with Japan, helping British fintech firms operating in the Asian country, it said. Financial services firms, food producers, coat-makers and biscuit bakers, as well as cheese producers, would benefit from the agreement which represented an “important step” towards Britain joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in the Asia-Pacific region. Major Japanese investors in the UK such as Nissan and Hitachi would benefit from reduced tariffs on parts coming from Japan and streamlined regulatory procedures, the British trade department statement said.

Britain said it will launch a new COVID-19 app across England and Wales on 24 September, which will allow people to use QR codes when they enter venues, boosting the country’s contact tracing to help keep the spread of the virus in check. With cases rising, Health Minister Matt Hancock said the new app would help NHS (National Health Service) Test and Trace, the scheme used in England to contact those who have been in contact with a COVID-infected person, to reach more people.

• Over the week, all the main Global Stockmarket indices were down, apart from the UKs FTSE 100. However, after taking the £’s depreciation into account, overseas investments were positive. The investment D-PIMS Portfolios were mostly up, particularly the higher risk portfolios. Although currency hedging in the Portfolios would have limited some of the gains for the £’s fall, 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.