While the equity markets have started the year in confident fashion, CFA UK's membership are less confident about the year ahead. In the society's annual forecasting survey, respondents indicate that they expect a 2% decline in the level of the FTSE by the end of 2018. They also expect Gilt and Treasury yields to rise, out to 1.65% and 2.82%, respectively, by year end. While their projections may be rather downbeat, they don't expect markets to collapse. Respondents forecast a slight increase in volatility (a VIX level of 13, up from 11) at the end of 2018.
To see the forecasts for the year - together with the banding of the projections - click here
It is also important to bear in mind that our respondents have a tendency to be cautious. Last year, respondents also predicted a slight decline in the FTSE and a widening in bond yields. Those predictions proved to be wide of the mark and at this year's annual forecasting event, attendees indicated that they were somewhat less optimistic about their ability to forecast markets this year than they were last year.