The Monday note - 24 April 2017

• The FTSE 100 fell by 213 points last week on rising geo-political risks to close on Friday at 7,114.5. The pound rose to $1.28 on Friday, up from $1.25 a week earlier on news that the UK will hold an early election. 
• China’s GDP increased by a better-than-expected 6.9% in Q1 2017 on an annual basis, thanks to strong industrial output. This was the fastest pace of growth since Q3 2015. 
• The IMF increased its GDP forecast for the UK in 2017 to 2.0% growth, which if correct would mark an increase on the 2016 figure of 1.8%. 
• US investment bank, Morgan Stanley, announced a 70% increase in Q1 2017 profits to $1.9 billion, which was ahead of analysts’ forecasts. 

Chief Economist comments: 

The French revolution begins, with neither of the round two candidates for President belonging to one of the mainstream parties. This comes just as the global economy is gradually building momentum, prompting the IMF to up its forecasts. However, voters remain unpredictable, which in theory could deter investment. Yet, evidence suggests that investors are disregarding the political noise, and deploying money. With Macron we have our first example of a centrist politician successfully using the populist tactics, and undermining the appeal of the radicals. Others will follow suit, which should mark the beginning of the end of the populist storm.