The Fine Wine 50 index closed Tuesday last week at 304.05, its highest level since October 2013. Global indices are joining the race, with the S&P 500 and Dow Jones hitting all-time highs, and the FTSE 100 striking an 11-month high.

The global wine market has been boosted by a weaker Sterling this year, with a surge in Euro and Dollar-based buying following the Brexit vote. Exposure on the Liv-ex Exchange, the total value of firm bids and offers – has hit a record high of £34.5 million, and the bid:offer ratio jumped up to 1.47 in the aftermath of Brexit. The number of active markets – wines with a bid or offer against them – has also climbed to an all-time high of 6,500, while the number of spreads – wines with a bid and offer against them – sits at 1,300.

While global equities are riding a steadily bullish trend, the Fine Wine 50 index still stands at 32% below its peak of June 2011 – the height of the Asia-led bull market. However, this year has seen slow but sure signs of recovery after nearly five years of decline.

“Genuine” recovery for Bordeaux wines?

The Fine Wine 50 tracks the daily price movement of the most heavily traded commodities in the fine wine market – the Bordeaux First Growths. It is calculated from 50 component wines – the ten most recent ‘physical’ vintages of the five First Growths: Haut Brion, Lafite Rothschild, Latour, Margaux and Mouton Rothschild.

The index has been on an upward trend this year for the first time since late 2012 and early 2013. In both cases, the rise has been boosted by Sterling weakness against the Euro. This year it comes after a period where the index largely ran flat, breaking the cycle of previous years and leading to speculation that the First Growths are finally seeing real recovery.

In 2012-2013, the boost was only a momentary one – the index declined when the Euro drifted, suggesting the First Growths were still seen as being over-priced. Decline continued through to August 2014, when the index “bottomed out”. This time however, we are seeing a sustained rise month on month, along with greater overall market share and a very high bid:offer ratio.

It may be too early to tell, but the ‘Brexit effect’ might just be the catalyst the fine wine market needed for sustained, long-term recovery.