Global equity markets have continued to fall this week amid escalation of geopolitical tensions. Protests in Hong Kong reached new levels yesterday after anti-government demonstrators flooded the airport and forced its closure. The political crisis in Asia's leading financial centre has taken 10% off the value of the city's Hang Seng index this month, including a fall of 1.8% last night. 
European indices are lower this morning, albeit more moderately, while concerns over the US-China trade war encouraged the S&P 500 to fall 1.2% overnight. Last week, markets were also affected by trade tensions: the MSCI China index ended the week down 1.8%, while Wall Street fell 0.4%.  
Investor sentiment has also taken a hit from primary elections in Argentina, where the current market-friendly President suffered unexpectedly poor results. Speculation that Mauricio Macri will subsequently lose October's election sent the Argentinian peso tumbling as much as 25% against the dollar yesterday.  
Britain's economy shrank for the first time in almost seven years in the second quarter, fuelling fears that Brexit uncertainty may push the UK into a recession by the end of the year. GDP fell by 0.2% as marginal growth in the service sector was offset by contractions elsewhere, with manufacturing suffering significantly. 
The unique headwinds facing the UK, especially the threat of a no-deal Brexit, mean that bets against sterling have hit their highest level in more than two years. Yesterday, the pound hit a decade-low against the euro of €1.0724. Some good news was provided by the Office for National Statistics this morning, however. It revealed that UK wage growth has reached 3.9%, the highest rate in 11 years.  
With equity markets under severe pressure, the price of gold has risen again in the past week, whilst US Treasury yields have fallen. Oil prices, meanwhile, fell again as growth concerns affect the outlook for demand.

Walker Crips
Old Change House
128 Queen Victoria Street
London EC4V 4BJ

020 3100 8000
www.wcgplc.co.uk
[email protected]

Important information

This publication is intended to be Walker Crips Investment Management’s own commentary on markets. It is not investment research and should not be construed as an offer or solicitation to buy, sell or trade in any of the investments, sectors or asset classes mentioned. The value of any investment and the income arising from it is not guaranteed and can fall as well as rise, so that you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. Movements in exchange rates can have an adverse effect on the value, price or income of any non-sterling denominated investment. Nothing in this document constitutes advice to undertake a transaction, and if you require professional advice you should contact your financial adviser or your usual contact at Walker Crips.

Walker Crips Investment Management Limited is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange. Registered office: Old Change House, 128 Queen Victoria Street, London, EC4V 4BJ. Registered in England number 4774117.