Markets had a positive week with Global Equities as measured by MSCI ACWI, returning +2.26%. Europe Ex-UK Equities outpaced US Equities +2.65% vs +2.22%, slightly reversing the trend that has prevailed since the financial crisis. UK Equities, as measured by the FTSE All Share returned +2.65% and Emerging Markets as measured by MSCI EM advanced by +2.73%. Each of the Equity returns listed above are in GBP and were slightly aided by Sterling’s underperformance against major global currencies over the course of the last week.

Fixed Income, as measured by the Barclays Global Aggregate Index returned -0.33% over the last week. High Yield Bonds outperformed Global Treasuries +0.67% vs -0.54%.

Amid the relatively buoyant markets, increased concerns were voiced over the past week about the robustness of global economic growth. Economic datapoints and sentiment indicators have been deteriorating since the latter part of last year. This prompted the Managing Director of the International Monetary Fund to warn of a “synchronised slowdown” in global growth, as the IMF cut its growth forecast for many major economies. Italy is now in recession, and the US is cooling off as the impact of Donald Trump’s tax cuts begin to weaken.

Perhaps most shocking of the datapoints released last week were the numbers relating to German manufacturing data. In volume terms, orders were down -8.2% year-on-year. Foreign orders were down -12.6%, with orders from other Eurozone countries down -13.8% and orders from the rest of the world off -11.6%. The German manufacturing sector is now likely to be in recession, with big implications for employment, labour income and broader GDP