At least currency markets noticed the budget

Last week saw global markets showing gains again. The UK Index of larger listed companies is a little lower but the US S&P 500 hit another all-time high, driven by renewed interest in megacaps. Bond prices rose and sterling is stronger against the US Dollar. And yet, if you look at our data table, it shows negative equity index returns. So, what is going on?

When Sterling strengthens, it means that, for us, assets priced in other currencies weaken – and Sterling has risen by about 1.5% against the US dollar during the past week. That strength may be partly down to the budget

Returning M&A returns?

The trend of increasing Mergers and Acquisitions is picking up. It became noticeable a few weeks ago when we wrote about the bids for the British retailer Currys, and US-based Capital One’s capture of Discover Financial.

Corporate deal activity tends to reflect both business confidence and financial conditions. But they are expensive, time-consuming and risky, since they might fail to complete or ultimately destroy value. It is therefore no surprise that the recent bout of M&As comes as capital markets are in a buoyant mood.

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