WEAKER GROWTH OUTLOOK Growing signs of global economic slowdown have paradoxically led to a recovery in risk sentiment this week. Markets are forward-looking and sense that evidence of a loss of economic momentum brings with it more clarity on a peak in inflation and, eventually, interest rates. Global PMI surveys have reinforced expectations of softening activity and are also pointing to some cooling of inflationary pressures, raising hopes that central banks may not have to

FED UPS THE ANTE ON RATES AGAIN This week has been dominated by central bank updates. Firs t up was the US Federal Reserve, which raised interest rates by 75 basis points, its largest move at a single meeting since 1994. The Fed had originally signalled an intention to hike by 50bp but seems to have been swayed by the May CPI inflation figures proving to be stronger than expected. Next up was the Swiss National Bank, which hiked by 50bp, an even bigger surprise as it was exp

CENTRAL BANKS CONTINUE TO SEND HAWKISH SIGNALS This week has seen further moves to tighten monetary policy around the world. On Tuesday, the Reserve Bank of Australia raised rates by a larger than expected 50 basis points. That was followed on Thursday by the European Central Bank who confirmed that it will probably raise interest rates by 25bp on 21st July. In addition, it indicated that rates could be hiked by a further 50bp in September with further rises expected to follo