At some stage stocks will cease to be driven by the promise of ever looser monetary policy and rely instead on the underlying fundamentals that are driving the current expectation for lower rates and more quantitative stimulus. Despite a number of company profit warnings and signals of slowing economic growth the allure of an attractive yield in relation to much of the fixed income market continued to drive European markets higher in July 2019 with FTSE World Europe ex UK Index rising by +2.0%. Admittedly, much of the Sterling denominated index move was boosted by the currency weakness much influenced by new British Prime Minister Boris Johnson’s insistence on a hard no deal Brexit should the EU not renegotiate the current withdrawal agreement. Unsurprisingly, the EU were not overly forthcoming in their willingness to undertake such a course of action and Sterling suffered against the Euro accordingly. Although it is impossible to second guess the outcome of this situation and the impact this may have on European Equities, the EU did cite Brexit uncertainty as one of the reasons for a further cut to European GDP growth expectations now forecast at a feeble +1.2% for 2019. Clearly Brexit uncertainty is only one of a host of reasons behind this downgrade with the continued US-China trade spat in particular harming overall business confidence. Brexit also wasn’t the only political development to impact markets over the course of the month. In Italy snap elections loomed as the Deputy Prime Minister and leader of the Northern League party continued to threaten to pull out of the already shaky coalition which continues to prop up the country’s continually shaky political situation. This has started to cause some jitters in the Italian equity market which had clawed its way back to one of the better performing equity markets in Europe following a weak start to 2019.