The big news for the markets is that the Fed will taper its scaling down of quantitative easing (QE - otherwise known as asset purchases) ending altogether by December 2014. 

Why does this matter so much? First, a sudden stop could result in immediately higher interest rates with a fluid knock-on effect across key economies. This, in turn, as we saw briefly just a few weeks ago, could trigger a flight from equities as the consequences of unwinding QE on interest rates, funds liquidity and exchange rates became clearer.  

The strengthening dollar could itself help to derail US economic recovery. So tapering is a ‘no brainer’, yet the markets have still reacted today to the news (intended as conciliatory) with resurgence in the dollar and falling share prices. 

Amidst the Fed’s latest guidance, the new Bank of England governor, Mark Carney, prepares to take over at the end of June. He has already appointed a new senior role, chief operating officer (COO), to shed the increased management burden, bringing on board Charlotte Hogg from the Hogg/Hailsham family ‘stable’, who joins with a strong track record. 

As we mentioned last month the economic headwinds have eased and it’s not just the mood music change now but some beefy data, which is helping to make this seem like it may be for real. Services sector growth, job vacancies, retail sales and even unemployment all look to be heading in the right direction. Nevertheless, there are many caveats and obstacles to overcome and smooth it will not be, but Q2 at least looks to be a more positive place for the economy than we have seen for some considerable time.

The recruitment industry has been quiet in the past week or so but Impellam, following its recent peer shares out-performance, provided shareholders at its AGM yesterday with a trading update which asserted that its UK and North American staffing operations were both seeing increased activity and growth in net fees and EBITDA. However, the woes of many healthcare providers are echoed in the news that Medacs, too, sees challenging market conditions with volumes and gross profit under pressure and Impellam’s non-recruitment division also remains weakened. While this statement has skimmed the cream from the share price, falling 6.7% on the day, it remains almost 30% ahead of its 12-month low but now well below the spring highpoint, in line with many of its peers.