Leading Indicators | Will market volatility spark a rush for safe-haven assets?
13 August 2024
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Here we look at the leading indicators in the world of economics.
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Spikes in volatility short-lived
Recent turbulence in equity markets, spurred by weak US employment data and a sharp correction in US tech stocks led to a spike in the VIX (a measure of volatility), though this has since gradually declined to 21.2. In times of market volatility, investors may turn to safe-haven assets like Real Estate, where values appear to be stabilising.
UK 10-year gilt yield drops below 4% for the first time since March
Earlier this month, the Bank of England began its loosening cycle by cutting rates to 5.00%. Today’s robust labour market data has since boosted the pound to $1.28, leading markets to price in one more rate cut this year, with a 63% chance of a second. Meanwhile, the UK 10-year gilt yield has dipped below 4% for the first time since March 2024, currently at 3.96%.
Living sectors #1 in Q2 2024
In Q2 2024, the Living Sectors led with £3.0bn in investment. This was followed by Industrial (£2.5bn), Hotels (£2.1bn), Retail (£2.0bn), and Offices (£1.7bn). Hotels (+326%), the Living Sectors (+54%), and Retail (+26%) were the only sectors to record an increase in investment YoY in Q2 2024.
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