Elsewhere, monetary easing continues in the Eurozone, Japan and China, while in the UK, monetary policy is set to remain loose until well into next year – although we may see a temporary increase in reserve requirements of those institutions lending heavily into the housing market.
Aside from monetary policy, we are in a relatively quiet season for Company profit announcements ahead of the year end. However the flow of merger and acquisition activity continues and the general low interest rate environment continues to provide opportunities for corporate fund raising and balance sheet strengthening.
For the moment at least, our broad asset allocation approach remains unchanged. However in portfolios with short time horizons we are inclined to reduce exposure to index linked investments given the probability of only modest increases in the Retail Price Index over the next year or so.