MONEY MATTERS: Oh so quiet - but what is brewing?

Scott Woods
Scott Woods
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The shares, bonds and currencies of emerging markets bounced, outperforming developed markets and reversing declines seen earlier this month.

The gains came as remarks from Janet Yellen, Federal Reserve chair, stoked investor expectations that the US central bank will not hasten to withdraw stimulus from the economy.

Company shares worldwide also advanced, with the MSCI All Country World Index snapping a two-week decline in US dollar terms. Tech stocks topped the leaderboard, surging about four per cent. Meanwhile, in US the dollar lost ground against its major rivals, while bond markets climbed.

It’s quiet, but is it too quiet? The Vix index fell to 10 last week. This indicator of likely fluctuations in the S&P 500 is currently in a benign state, reflecting the US market’s serene progress upwards.

But beneath the calm surface lie hidden currents. Rotation between sectors has been brisk, as investors are torn between desire for growth (IT) and safety (utilities, heath care) and political risks abound. Who can predict Donald Trump’s next tweet, far less what North Korea has in mind? Historically, when the Vix has spiked up, its moves have been sudden.

• Almost a decade on from the onset of the global financial crisis, Ireland’s government is €200bn in debt, four times its 2007 level, according to its National Treasury Management Agency.

While Ireland was quick to emerge from a crisis that effectively saw the collapse of its banking system, its financial health remains far removed from that of the European Union (EU) member average; debt per capita in Ireland sits at close to €42,000 per person, dwarfing the EU average of around €24,000.

The value of investments and the income they produce can fall as well as rise. You may get back less than you invested.