WHAT THE CURRENT ACCOUNT CAN TELL YOU 5% UK current account balance - PowerPoint PPT Presentation

WHAT THE CURRENT ACCOUNT CAN TELL YOU 5% UK current account balance 4% Low Point Q4 1988 - Low Point Q2 1974 - 5.1% 3% 4.3% CA deficit. UK locks IMF bailout 1976 2% £ into ERM, forced Low Point Q4 2015 - % of GDP out in 1992. 6.0% 1% Large CA deficit, Brexit 0% fears push £ down -1% -2% Low Point Q4 -3% 1967 -2.6% peg devalued by -4% 14.3% in 1967 -5% Q4 2006 -3.3% Sustained CA deficits, sign of -6% credit bubble. GFC hits, £ sinks -7% Source: Bloomberg 8 Nov. 2018 B O N D V I G I L A N T E S

Sterling: reflection or manipulation? USD x GBP 2.6 2.4 2.2 2 1.8 1.6 1.4 1.2 1 Source: Bloomberg 15 Nov. 2018 B O N D V I G I L A N T E S

US Inflation: another story Source: Haver, RBC Capital Markets US Economics, November 2018 B O N D V I G I L A N T E S

The week ahead Monday 19: UK house prices, ECB Current Account Tuesday 20: US housing starts Wednesday 21: Japan inflation, US existing home sales, U. Michigan sentiment Thursday 22 : EU consumer confidence Source: Bloomberg as of 15 Nov. 2018. B O N D V I G I L A N T E S