The Monday note - 4 February 2019

• The FTSE 100 shot up by 211 points last week, closing at 7,020.2 on Friday, bolstered by commodities, better than expected US job numbers and progress on trade talks between the US and China. The ten year Gilt yield stood at 1.25%. 
• The Federal Reserve surprised the markets by moderating its guidance on interest rates. The central bank says it intends to be “patient” on hiking rates any higher. 
• China has unveiled stimulus measures in the form of tax breaks for small businesses run by recent graduates, low-income workers and companies that hire in that demographic bracket.
• Nissan is expected this week to confirm plans to move production of the X-Trail diesel SUV from Sunderland to Japan. 

Chief Economist comments: 

The global economy is currently in the midst of a moderate slowdown, which I suspect will not last too long. The Fed is stepping back from further rate hikes, easing pressure on other central banks to follow suit to protect their currencies. On the other side of the globe, Chinese policymakers are acting to support growth. Finally, the UK government has had a warning shot from Nissan on what to expect if Brexit policy is not realistic. Assuming the politicians heed the warning, economic spring could be close.