InvestNow News 5th July – Harbour – Finely balanced, markets walking a tightrope 
5th July 2019
Key points
- Trade tensions again dominated the headlines during June, while the “truce” reached at G20 summit mitigated some left-tail event fears, there is plenty yet to play out and the outcomes are likely to be non-binary.
- Trade tensions and a string of softer than expected economic data led global yields lower in June.
- In line with the global trend, domestic data erred on the side of disappointing with low PMI and business confidence reads. However, it’s not all doom and gloom with the latest GDP figures released in June showing a strong construction and service sector.
Key developments
Global equity markets performed strongly in June with the MSCI World index (in local currency) returning 5.9% over the month. Early in June markets were assured by the US Federal Reserve (the Fed) Chair that the Fed will “act as appropriate to sustain economic growth”. While these words are unlikely to become as influential as ECB Chair Mario Draghi’s “whatever it takes” comments in 2012, they were enough to make investors feel comfortable with softer economic data in the knowledge (or hope) that the Fed will be there to underpin growth. A likely source of volatility in the next 12 months is whether the market’s definition of appropriate action is the same as the Fed’s …