The news headlines on massively damaging hurricanes, floods and heat waves are almost daily. Extreme weather is now the norm. This is likely to lead to a not insignificant hit to potential global economic growth over the next 20 years unless preventive and remedial action is taken. Given the current rate of losses, we estimate global growth could be hit by 1% pt a year. But crises provide opportunities. Catastrophe or impact bonds will be a growing market. Green bonds to fund resilience infrastructure could deliver high returns to compensate for higher risk. And investment in renewable energy is increasingly profitable.

President Xi is a communist ideologue committed to the supremacy of the Party. These ideals contradict many of China’s economic objectives and mean that economic reform will be partial. China will remain a low return economy.

Europe is in the process of forging a new direction. This is a response to the realisation the European project needs to deliver tangible economic benefits to its citizens if it is to succeed. France and Germany are the powerhouses of this change. But Italy, Spain and most smaller European states will follow. We remain long the euro versus the US dollar and the British pound. And we stay long Eurozone equities.