Oil price spikes have contributed to almost all US recessions since 1950. But with the US shale revolution, most investors are more concerned with how low oil prices could go. Ultimately, OPEC will decide the answer to that question. Our analysis suggests OPEC will continue to limit production when necessary, with the aim of generally keeping prices between $45-$55 outside of recessions and significant new supply disruptions.
Inflationary disappointment doesn’t repeat itself, but it does rhyme. Alongside our new political paradigm, we see the search for inflation as a key driver for central bank policy and markets for the rest of 2017. I tie those two market themes together using the title from one of my favourite songs, only for host Mark Barton to catch me out by revealing the hidden link live on air.
Markets toasted France on Sunday night (April 23) as Macron made the second round to challenge Marine Le Pen. It broke a sequence of shock election results in G7 countries and for once meant our Asset Allocation team got a full night’s sleep (see Sunday Bleus which we updated live on Sunday night).