RISING POLITICAL RISK SPURS STRUCTURED SOLUTIONS Election uncertainty

摘要

From the UK's vote to leave the EU to the election of Donald Trump as US president, the number of unexpected political events appears to be rising. As a result, financial markets spanning everything from commodities to equities and fixed income are increasingly in thrall of political outcomes, presenting both challenges and opportunities for investors. Following the surprise result of the June 2016 Brexit referendum, sterling fell against the euro and dollar by as much as 20%, while gilt yields dropped to an all-time low. Later in the year, yields rose as investors sold debt over concerns about the UK's heavily foreign-funded deficit.