It's your Mortgage Day!
The Italian referendum is a political issue. The 'No' vote does not mean that Italy will now face an economic crisis or leave the euro area. European banks are better capitalised, there is stronger centralised supervision by the ECB, it is supplying bountiful credit and countries/banks have become less dependent on interbank ties, thus reducing the risk of an acute financial crisis.
The financial markets' initial reaction is therefore limited.
Although there are undoubtedly challenges ahead, we do not see the need to alter our investment strategy and are adhering to our cautious, positive economic outlook.
We support our recent decision to increase shares substantially but are also waiting for attractive buy-in opportunities. Bonds are still well below the benchmark level in a world where inflation is starting to creep up and the US Fed is on the cusp of increasing interest rates.