Karen Ward, Managing Director, is the Chief Market Strategist for EMEA. Karen has considerable experience in both public policymaking and economic and financial analysis. She started her career at the Bank of England providing supporting analysis for the Monetary Policy Committee. She joined HSBC Global Banking and Markets in 2006 as Chief UK Economist. She was promoted to Senior Global Economist where her work included The World in 2050 - an analysis of the structural changes affecting the global economy and the rise of the emerging economies. Karen was appointed Chief European Economist in 2014. In 2016 she was appointed Chair of the Council of Economic Advisers for the Chancellor of the Exchequer. In this role she advised the Chancellor on macroeconomic issues including fiscal strategy and Brexit. Karen has a Masters with Distinction in Economics from University College London.
The new prime minister is likely to meet similar challenges given the nation – and as a result parliament - remains divided over what it wants from Brexit. But investors must understand the impact “no-deal” would have on sterling, stocks and gilts versus “change of government”.
Emerging market equities are inherently volatile. But investors shouldn’t be deterred. If investors have a long time horizon, the emerging markets are expected to pay returns well in excess of developed market equities.
The coming week is a very big week for sterling investors since the Chancellor will present a new statement on fiscal policy and there are a series of votes in the House of Commons to break the Brexit impasse.
Historically, an inverted yield curve has been a useful indicator of recessions. However, quantitative easing may have distorted that signal. Therefore, we would not rely solely on the yield curve but also look at other indicators to track economic momentum.
Last night a series of votes took place in the UK House of Commons. The purpose of the votes was to establish a potential way forward for the Brexit negotiations that could command the support of a majority of members of Parliament (MPs).