Please see the below article from Brooks Macdonald detailing their discussions on Equity markets, current geopolitical affairs with Trump and the Bank of England hold on interest rates. Received – 21/03/2025.
What has happened
Yesterday saw investors circle-back on tariff worries, pulling equity indices lower after what had been a decent session the day before. The US S&P500 equity index edged down -0.22%, while the pan-European STOXX600 equity index underperformed, down -0.43%. Relatively speaking, the UK equity market led US and European markets on Thursday, with the MSCI UK equity index finishing almost flat on the day down just -0.05%, all in local currency price return terms.
Bank of England takes a relatively hawkish turn
With interest rates on hold at 4.5% as expected, yesterday’s surprise from the Bank of England instead came from the split in the votes of the Bank’s Monetary Policy Committee (MPC): of the 9 voting members, 8 voted for no change, with only 1 vote (MPC external member Swati Dhingra) for a 25 basis points cut. That vote split was more hawkish than the expected 7-2 hold-versus-cut split going into the meeting. Meanwhile the Bank said it continued to favour “a gradual and careful approach” to any further interest rate cuts, not least given “an intensification of geopolitical and trade policy uncertainty”.
Canada expected to hold snap election
News reports from Canada’s Globe&Mail have said that Prime Minister Mark Carney is expected to call a snap federal election, expected to take place late April. It appears Carney might be looking to take advantage of a bump in opinion polls for his ruling Liberal Party, following Carney replacing former leader Justin Trudeau. Rather than domestic issues, it is likely to be the ongoing tariff-spat between Canada and US that will dominate the minds of voters running into the election.
What does Brooks Macdonald think
Investors are finishing the week thinking about tariffs again – it is now less than two weeks to go till US President Trump’s Wednesday 2 April “Liberation Day” reciprocal tariff announcement. This is when the US will announce reciprocal tariffs on trade with an as-yet-unknown number of countries around the world and at as-yet-unknown tariff rates. Investors crave certainty, but it seems for the next couple of weeks, that is going to be in short supply – it suggests markets may continue to be volatile for a while yet.
| Index | 1 Day | 1 Week | 1 Month | YTD | |
| TR | TR | TR | TR | ||
| MSCI AC World GBP | -0.19% | 2.52% | -6.71% | -2.91% | |
| MSCI UK GBP | -0.05% | 1.82% | 1.29% | 7.68% | |
| MSCI USA GBP | -0.19% | 2.51% | -9.81% | -6.96% | |
| MSCI EMU GBP | -1.17% | 1.96% | 1.91% | 12.81% | |
| MSCI AC Asia Pacific ex Japan GBP | -0.06% | 2.86% | -2.17% | 1.10% | |
| MSCI Japan GBP | 0.81% | 2.74% | -0.38% | 1.75% | |
| MSCI Emerging Markets GBP | -0.19% | 3.04% | -1.45% | 2.87% | |
| Bloomberg Sterling Gilts GBP | -0.24% | 0.41% | 0.27% | 0.60% | |
| Bloomberg Sterling Corps GBP | -0.13% | 0.10% | -0.35% | 0.60% | |
| WTI Oil GBP | 1.66% | 2.40% | -8.18% | -8.08% | |
| Dollar per Sterling | -0.02% | 0.17% | 2.44% | 3.54% | |
| Euro per Sterling | 0.22% | 0.25% | -0.91% | -1.20% | |
| MSCI PIMFA Income GBP | -0.13% | 1.32% | -2.44% | 0.30% | |
| MSCI PIMFA Balanced GBP | -0.14% | 1.57% | -3.10% | 0.04% | |
| MSCI PIMFA Growth GBP | -0.17% | 1.93% | -4.09% | -0.41% | |
| Index | 1 Day | 1 Week | 1 Month | YTD | |
| TR | TR | TR | TR | ||
| MSCI AC World USD | -0.22% | 2.70% | -4.43% | 0.52% | |
| MSCI UK USD | -0.07% | 2.00% | 3.76% | 11.49% | |
| MSCI USA USD | -0.21% | 2.68% | -7.61% | -3.66% | |
| MSCI EMU USD | -1.19% | 2.14% | 4.40% | 16.80% | |
| MSCI AC Asia Pacific ex Japan USD | -0.09% | 3.03% | 0.21% | 4.68% | |
| MSCI Japan USD | 0.79% | 2.91% | 2.05% | 5.35% | |
| MSCI Emerging Markets USD | -0.21% | 3.22% | 0.96% | 6.51% | |
| Bloomberg Sterling Gilts USD | -0.20% | 0.63% | 2.91% | 4.20% | |
| Bloomberg Sterling Corps USD | -0.09% | 0.32% | 2.27% | 4.20% | |
| WTI Oil USD | 1.64% | 2.57% | -5.94% | -4.82% | |
| Dollar per Sterling | -0.02% | 0.17% | 2.44% | 3.54% | |
| Euro per Sterling | 0.22% | 0.25% | -0.91% | -1.20% | |
| MSCI PIMFA Income USD | -0.15% | 1.49% | -0.06% | 3.85% | |
| MSCI PIMFA Balanced USD | -0.16% | 1.74% | -0.73% | 3.58% | |
| MSCI PIMFA Growth USD | -0.19% | 2.10% | -1.75% | 3.12% |
Bloomberg as at 21/03/2025. TR denotes Net Total Return.
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Marcus Blenkinsop
21st March 2025