It has been a very turbulent time in global financial markets, since the start of 2016, with concerns such as slumping oil prices and a slowdown in China. In this video from April 2016, Henk Potts, Director of Global Research and Investments for Barclays, gives his views on the outlook for global financial markets.

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Video transcript

“It’s certainly been a very turbulent time in global financial markets since the start of the year.

“We’ve seen a significant sell-off of in terms of equity markets. A number of factors have been unnerving investors. They’ve been worried about slumping oil prices and a slump in China.

“They’re also worried about the impact of higher interest rates in the US, and on the other side of the coin, the use of negative interest rates in Europe and more recently in Japan – with concerns this is starting to look like desperation coming through.

“All of which has created a cloud of uncertainty. It’s very difficult for analysts to see through that to understand what’s happening in terms of the real economy and where the true value lies.

“But what we should remember though is that the Global economy continues to grow. The IMF anticipates growth 3.4% this year, accelerating up to 3.6% next year, with better performance coming through from the developed world helping to make up some of the weakness we’ve seen from emerging markets.

“Corporate fundamentals still remain very positive indeed, but we do expect further turbulence and fluctuations as we go through the rest of the year.

“One of the areas where we could see further volatility is in FX markets – we know there’s a divergence in policy coming through from Federal Reserve compared to the European Central Bank, with the Fed raising policy, the ECB easing policy further from here.

“It means the dollar is likely to strengthen, and the Euro to weaken further from here. On a twelve month view, we’ve got Euro-Dollar back at 0.95.”

Henk Potts, Director of Global Research and Investments, Barclays.

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