Given the fairly pessimistic end to last week, we thought it would be a nice idea to start this Monday morning on a slightly more light-hearted note!

Markets were decidedly in a risk-off mood on Friday, with US, Asian and European Indices all recording negative returns. Whilst in reality, it is impossible to say with any certainty what sparked Friday’s move downwards (apart from there being more sellers than buyers), there are clearly more concerns facing investors.

To begin, on Friday the US Government was able to borrow money at a more attractive rate over 10 years than it could over three months – this is known as an inverted yield curve and it last happened in 2007. What does this mean? Essentially, lenders are willing to lock away their money for a longer period of time and accept a lower rate of interest. This tends to happen if they believe that interest rates are likely to fall. For the Fed to cut rates, the US economy would need to be sharply slowing and recession imminent. We are not saying that this is a sure sign of recession; however it is food for thought.

Turning to the Eurozone, PMI (Purchasing Managers’ Index) figures released on Friday from the Eurozone’s two largest economies showed a continued slowdown. German manufacturing endured its deepest slump since 2012, whilst France’s private sector contracted. Pundits are of course looking for explanations, with trade tensions, weak global growth (in particular from China), tariffs and even Brexit concerns sharing the blame. In any case, German 10-year bunds saw yields drop below 0%, whilst yields on French, Spanish and Italian debt also fell.

Finally, our gaze falls upon… Brexit! Following the EU’s decision to grant a short extension, the date to now watch is Friday 12th April. What the final outcome will be is anybody’s guess. The extension is contingent on Theresa May’s deal being approved by parliament, however, given that MPs look likely to back a plan to hold ‘indicative votes’ on as many as six other options, the chances of the deal progressing look slim. Interesting times!

A brief mention for sport this week as the Euro 2020 qualifiers are now underway. England’s campaign was off to a fine start as they convincingly beat the Czech Republish by five goals to none – a stunning result. No doubt Man City will be hoping that Mr Sterling’s performances continue in this vein domestically. There is little else worth talking about, although notably Scotland did suffer a shock defeat to Kazakhstan in their opening game!

From the team here, we wish one and all a pleasant week.