Yellen rolls with the (Trump) punches
Last night’s decision by the US Federal Reserve to raise interest rates by 0.25% was arguably the least interesting part of the FOMC meeting and press conference given it had been priced in as a virtual certainty by investors. The more interesting aspect was what happened the Fed’s ‘dot plot’ or members’ projections for changes in the Fed funds rate over the next few years.
Irish GDP/GNP Q3 2016 – Exceptionally strong performance, but largely due to ‘once offs’
This morning the Central Statistics Office (CSO) published the national accounts for Ireland for the third quarter of 2016. Overall they showed that real GDP and GNP grew by 4% and 3.2% respectively in the quarter meaning over the past twelve months they grew by 6.9% and 10.2% respectively (see table 1).
As you will all have heard by now Donald Trump is now US President Elect thanks to his unexpected win in yesterday’s election. So far the market reaction has been fairly predictable although conditions have improved a little compared to a couple of hours ago. Below I’ve provided a market update and our initial thoughts on the implications of the result.
OPEC production cut puts a floor under oil prices
At last night’s sideline OPEC meeting the cartel agreed a framework for cutting production in 2017. The production cut is the first since 2008 and could lower global supply by around 1 million barrels per day in 2017 and beyond. The specific country production quotas will be agreed at its November 30th meeting.
Fed/Bank of Japan meetings keep investors on an even keel
This week’s meetings of the Bank of Japan and the US Federal Reserve were always going to be closely watched following some investor jitters post the ECB meeting earlier this month where the Bank didn't extend its Quantitative Easing (QE) policy. Both meetings this week reinforced our long held view that we’re in a 'lower for longer' interest rate cycle and that even where there are rate hikes (such as in the US) they will be very gradual.