Beaufort Analysis 267 – “Coddiwomple…”

Coddiwomple (v.) To travel in a purposeful manner toward an as yet unknown destination.

As we look to the recent movements in the markets, ‘coddiwomple’ seems an excellent word to explain these movements. Following the announcement of US inflation data last week, the markets wobbled as we continue to move towards this as yet unknown destination. Closer to home, UK inflation remained at 3% in January, increasing concerns that we could expect more rate rises from the Bank of England than initially anticipated, and they could come sooner than originally thought.

In other central bank news, the Bank of Japan’s Governor Kuroda has been nominated for a second term by Prime Minister Shinzo Abe. This is a rarity as the last time someone won a second term was almost 50 years ago; this indicates Abe’s confidence in Kuroda to boost Japan’s economy.

Whilst it was announced last week that the European Union grew at its fastest rate for a decade during 2017, the headlines around Brexit continue to be tumultuous. Foreign Secretary Boris Johnson’s speech last week to appeal to Remainers has been named the start of the ‘road map to Brexit’, a journey we are travelling on with the last stop not yet known. Theresa May met with Angela Merkel in Berlin last week ahead of the Brexit trade negotiations beginning today, with Merkel admittedly curious on the UK’s aim in the negotiations.

Last week welcomed the start of the Chinese New Year, the year of the Dog. The typical characteristics of the Dog is loyalty, and the recent volatility in the market comes at a good time to be mindful of this loyalty on this purposeful journey. It is a reminder to remain loyal to your investment objectives and ignore headline noise.