Worldwide Financial Planning

In domestic policy, Trump’s efforts to undermine the authority of Federal Reserve chair Jerome Powell stepped up with the suggestion that Trump will name Powell’s successor as early as September (almost nine months before Powell’s term ends) as he pushes for aggressive US interest rate cuts.

Not long ago, such an escalation would have had oil prices soaring, traders scrambling, and central banks freaking out. But when Israel struck Iran, Brent crude futures prices did spike – 7 per cent in the day. Brent crude flirted around $78 (intraday high of 13 per cent). Yet by the time the dust settled, it drifted back down to around $73, even lower than when the hostilities began.

May retail sales in the UK fell by 2.7% from April and consumer borrowing on credit cards increased noticeably. However, consumer sentiment has improved, with expectations about personal finances notably better.

In a world where investors might be searching for the ‘least dirty shirt’, the UK can benefit from capital rotation away from the US/dollar. London still has legal credibility, deep capital markets, and familiarity. Don’t underestimate that.

The attacks were condemned by allied countries on both sides, but the uncertainty has been felt in markets. Equity markets were down on Friday
morning and the dollar strengthened a little after recent weakness.

The winners are already positioning themselves, trading in their own currencies, issuing digital money, and anchoring growth to real assets. The losers are waiting for the old world to return.