- Where we stand and possible scenarios ahead: After the EU approval of Brexit deal, we are going to pass through some tough times until the UK parliamentary vote on Brexit Withdrawal Agreement in December. UK Parliamentary ratification of the deal will be very difficult and will likely bring new episodes of market stress, but we think the most likely scenario is that the deal will ultimately be ratified (but probably not on the first attempt on 10th December). Whatever happens, uncertainty is likely to remain until the end-March Brexit date.
- UK Economy: Even though Brexit-related uncertainty is weighing on confidence, we assume that in the event of a Brexit deal (our base case scenario) the UK economy should experience a slight acceleration in 2019 and 2020. Furthermore, the labour market is in good shape and real wages, which are positive again, should support consumption.
- Investment implications: In the fixed income market, we have a relatively neutral view on Gilts (government bonds), becoming more constructive in case of a no-deal and more bearish in the other case. In the equity market we remain cautious on UK-listed equities, especially on UK stocks exposed to domestic growth. We look with more favour to more sinternationally-focused stocks and sectors with a majority of their earnings abroad or which report in a currency other than sterling. On currency: developments and trading in British Pound (GBP) are becoming increasingly binary: our base case scenario is that there will ultimately be a Brexit deal with the potential for the GBP to appreciate, but we expect the currency to show a very erratic pattern though. So, the sizing of position and risk management for investors willing to take GBP exposure will be of utmost importance.
Fany De Villeneuve
UK - International Press Relations
Amundi, the leading European asset manager, ranking among the top 10 global players, offers its 100 million clients - retail, institutional and corporate - a complete range of savings and investment solutions in active and passive management, in traditional or real assets.
With its six international investment hubs, financial and extra-financial research capabilities and long-standing commitment to responsible investment, Amundi is a key player in the asset management landscape.
Amundi clients benefit from the expertise and advice of 4,800 employees in more than 35 countries. A subsidiary of the Crédit Agricole group and listed on the stock exchange, Amundi currently manages nearly €1.8 trillion of assets.
Amundi, a trusted partner, working every day in the interest of its clients and society