Markets appear more confident the UK will avoid a ‘no-deal’ Brexit, but this isn’t feeding through to rate rise expectations. TwentyFour Asset Management's Ben Hayward examines why.

So is there any Brexit premium left at this juncture? We certainly believe there is.

For us, it is the insight into the US economy and the strength or weakness of their customers, that we find most interesting in the banking results, and especially so when the US economic data is increasingly pointing to a slowdown.

It is not clear to us just how much more monetary easing will placate equity investors, and we see a real risk that when we enter the third quarter earnings season next week, company specific data from the bottom up will be more of a shock than the macro picture has been.

"We think the downside to markets is still underappreciated, and thus we would prefer to stay long protection."

The active versus passive management debate is well documented, but with ESG or sustainable investing the debate takes on a new dimension.

When Mario Draghi unveiled the European Central Bank’s latest stimulus package earlier this month, the restarting of quantitative easing with €20bn per month of government bond purchases took most of the headlines.

The globally operating travel group Thomas Cook entered liquidation this week, after it was unable to reach an agreement between its shareholders, financiers and numerous creditors, leaving hundreds of thousands of travellers stranded. A potential restructuring would likely have resulted in a significant loss for bondholders, but now it looks like the senior unsecured bonds are virtually worthless – Debtwire expects a recovery of 0-10% and the bonds are now trading at around 6 cents.

Coming out of the summer, we felt the European ABS primary market would see heavy supply, with continental issuers taking advantage of a slow start to the year by using ABS to address annual funding targets, but also increasingly using ABS as a capital management tool. This has played out and demand has been extremely strong, as investors have shown a willingness to take money off the side-lines, aided by a tailwind from the additional stimulus announced by the ECB on September 12.