LIV-EX - MARKET UPDATE

Liv-ex 50: 263.69 (+ 0.35%) Liv-ex 100: 236.80 (- 1.44%) Liv-ex 1000: 244.55 (-0.78%)

Last night something big happened. The Federal Reserve Bank of America raised interest rates for the first time in almost a decade. US equities rose on the news (as did the Liv-ex 50!). Janet Yellen, the Fed Chair, said "the economic recovery has clearly come a long way" and signalled further tightening next year. The US economy is growing and inflation is back on the agenda. Good news for the dollar and in theory, good news for fine wine. Time will tell. But let's take a quick look back to the last time the Fed raised rates, in June 2006. It was the year the Fine Wine market really began to motor. Bordeaux's share of trade leapt from 78% to 92% (today is 74%). The First Growth's share of the market rose from 29% to 45% (today we are back at 30%). And the Liv-ex 100 rose 50% year on year to 154, en route to 365. Today its stands at 237.

The market has seen it all in the past decade. Boom and bust writ large. And as the Fed starts to normalise monetary policy, another stage in the cycle is sure to begin.

Liv-ex 50 index - Dec 16th 2015 close