Two weeks post-Brexit and financial markets appear to have weathered the storm relatively better than some might have expected. Somewhat counter-intuitively, the UK’s FTSE100 index and benchmark US equity indices have more than recovered their early losses – in fact they closed last week at their highest levels in 2016. Eurozone equities have fared less well however. This may be due to the fact that the pound has depreciated more than the euro, providing a boost to the revenues of UK-listed multinationals, while European stocks continue to be weighed down by sluggish Eurozone growth and concerns about the future political fallout of Brexit in the rest of the EU. Meanwhile Japanese equities have been hurt by the strong yen and the Nikkei is down about 7% since the UK’s referendum.

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The prospect of further interest rates cuts and/ or other monetary policy easing has undoubtedly helped sentiment in financial markets. The Bank of England’s MPC meets on Thursday this week, and may cut its benchmark interest rate by a quarter percent to 0.25%. If not this Thursday, a rate cut is expected in the UK in August, after Governor Mark Carney said last week that “some monetary policy easing will likely be required over the summer”. The ECB and Bank of Japan are also expected to ease monetary policy further in the coming weeks, as they seek to reassure markets and support economic growth.

Against this background, most analysts are no longer expecting the US Federal Reserve to rush to increase interest rates, even though the economic data from the US shows solid growth and an improving labor market. 287,000 new jobs were added in June, much more than expected, and the unemployment rate remains under 5%. Markets are now only pricing in a Fed rate hike near the end of 2017. For consumers in the UAE, this means borrowing costs are likely to remain lower for longer. For investors, US equities appear to be in a sweet-spot: solid US growth and low interest rates for the next 12 to 18 months.

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Commodities have also benefited from the prospect of looser monetary policy all round – silver and gold both reached their highest levels since 2014, and further uncertainty about the mechanics of Brexit as well as the potential for other referenda on EU membership in the coming year are likely to keep gold in particular supported.

Kate Pennington is a freelance financial journalist. She studied Economics in the UK and subsequently spent several years working as an analyst in London. Kate is fascinated by financial markets and can usually be found reading the FT while drinking bottomless cups of coffee.