August was dominated by inflation and interest rate expectations as well as renewed stress in the Chinese property sector. It was a largely difficult month for markets. Bond yields continued to creep up, perhaps reflecting the potential impact on inflation.

Inflation watch continues, and is likely to for some time. Any variation from predictions, pushes interest rate expectations onto a new path, and in turn, markets.

July was another buoyant month for global stock markets, which were mainly in positive territory.

The UK’s inflation rate cooled in July, dropping to 7.9% - the lowest level in a year. Lower inflation rates continued overseas as well, with the US and Eurozone rates both dropping.

The Bank of Japan made further tweaks to its yield curve control - another step away from its ultra loose monetary policy.

June helped to complete another strong quarter for equity markets globally and most are in positive territory this year now.

Markets are clearly looking forward now to an era of lower inflation and thus interest rates peaking and then declining. How much of this is driven by mere optimism remains to be seen.

Although economic indicators point overwhelmingly to a slowdown, a ‘soft landing’ should not be totally discounted should consumers keep spending - driving corporate earnings and economies to muddle through in spite of the headwinds.

Financial headlines were dominated by the negotiations between US President Biden and the Republican House Speaker around increasing the US government debt ceiling to $31.4 trillion. As expected, the parties came to an agreement ahead of the deadline and the bill passed through both chambers of Congress, avoiding a default and providing some reassurance to markets.

Elsewhere, the focus continued to be on inflation and central banks’ action in relation to it.

By 2020, many, now highly qualified market participants had no experience of any alternative environment and many investment processes were shaped by only ten or twenty years of historic data, which was absolutely fine…..until everything changed