The Economic Policy Uncertainty Indices
Measures of economic policy uncertainty are at all-time highs. This has historically led to depressed capex and equity valuations. Falling uncertainty, however, can be supportive of markets, with our longer-term analysis showing double-digit forward returns to buying 'peak' uncertainty levels. This is a further support to our positive view of the fundamentals in markets such as the US and China, and caution on markets such as the UK.
We analyse the impact of economic policy uncertainty on markets, proxied by the indices here. These economic policy uncertainty ((EPU)) indices