This morning’s data from Europe has been mixed: UK’s inflation figures were surprisingly strong, while a key German economic sentiment survey came in significantly weaker and Eurozone’s construction output shrunk more than expected.
I am pleasantly surprised to find the Bank of England Monetary Policy Committee managed to hold rates steady at the 0.50% all-time low, and not expand its purchased assets beyond the previous £350 billion. It is a triumph of sane assessment of real conditions over highly anticipatory policy making.
Stock markets traded within sight of their highest levels this year today as the prospect of stimulative economic policy across the developed world eased immediate concern over Britain's vote to leave the European Union.
Stocks on major world markets fell and benchmark U.S. government bond yields hit all-time lows today as worries about Britain's exit from the European Union pushed sterling to a fresh 31-year low, triggering a scramble for the safest and most liquid assets.
The prospect of further cuts in interest rates and bond-buying to support a fractured global economy kept stock markets on the up in Europe and Asia on Friday, and drove U.S. and European government bond yields to their lowest in years.