Rigorous empirical research is indispensable for developing successful investment strategies. This is particularly true in the field of quantitative finance, where investment ideas need to be thoroughly vetted and validated, before they can eventually be turned into top-notch products. At
Even the best-laid plans don’t always work. Prudential’s research study found that about half (51%) of retirees retired earlier than planned. While early retirement may seem like welcome news, only 23% retired earlier than planned because they either had enough
Where are we in the credit cycle? Most people consider us to be in the later stages of the credit market. That being said, we are at a point where I don’t see us running into a recession in the
By the end of 2017, the Japanese economy had expanded for two years straight, its longest growth streak since the 1980s. Reflecting this economic strength, in January of this year the Nikkei hit its highest level since 1991. Archibald Ciganer
Price Point Global markets are approaching the end of a prolonged period of accommodative global monetary policies as major central banks move toward tighter monetary conditions. While markets will likely see increased volatility and higher rates, divergence in the pace
Investment Monthly We remain overweight global equities and local-currency emerging market (EM) government bonds. We also retain our underweight stance on developed market (DM) government bonds, and global investment grade (IG) and high-yield (HY) corporate bonds Global equities fell in
Weekly Commentary U.S. short-term rates have largely priced in higher growth and inflation expectations, we believe, while structural factors anchor long-end yields. Political uncertainty flared up in Italy after a recent attempt to form a government failed, boosting demand for
The latest news from Italy is that President Sergio Mattarella has vetoed the appointment of eurosceptic Paolo Savona as finance minister in the government that the anti-establishment Five Star Movement (M5S) was trying to form with the anti-euro, anti-immigration Lega
Hoe je het ook wendt of keert, de groei in China vertraagt. Dat geldt vooral voor de groei van de investeringen in vaste activa, zoals ook blijkt uit de binnenlandse cijfers. Het beperken van risico, zorgen voor financiële stabiliteit en
Het doel van MiFID ll (Markets in Financial Instruments Directive), op 3 januari 2018 in werking getreden, is het efficiënter en transparanter maken van de Europese financiële markten en het vergroten van de bescherming van beleggers. Wat zijn de gevolgen
As the importance of emerging markets grows, there is an increasing degree of differentiation as professional investor groups are highly discerning. One example is the integration of sustainability criteria into the investment process. The inclusion of this additional risk perspective
Gezien de grote uitdagingen waarmee de wereld geconfronteerd wordt, is het van groot belang ESG-factoren te integreren in het beleggingsbeleid, misschien nog wel bij uitstek in emerging markets. ESG is een integraal onderdeel van een duurzaam rendement
We have seen a sea-change in investor mentality over the last decade, resulting in multifaceted approaches towards ESG investing. These range from integrating material ESG related considerations at the asset level into investment decisions through to utilising an SRI screening
Geen enkele institutionele belegger ontkomt nog aan duurzaam beleggen. Maar de vraag ‘hoe dan?’ leeft volop. Volgens Monique Donders en Coen Brouwer van BlackRock heeft de vermogensbeheerder al veel van de antwoorden paraat. Een gesprek over stewardship, purpose en eigen
Marketexpress The football-loving Italians already have to watch the World Cup next month without “La Squadra Azzurra” playing, and last week a new Italian government was also eliminated from the finals. The premier-to-be resigned when his appointee for the post
Euro Rates Watch We have raised our Italian government bond yield forecasts, following a more aggressive sell off than we expected We now see the 10y Italy-Germany spread rising to 220bp and sticking at that level over the coming months,
Investment Talks Political uncertainty: On May 27th, the designated Prime Minister Giuseppe Conte gave up his mandate to form a Government. The Italian President acted promptly and gave Prof Carlo Cottarelli, an economist, former IMF representative and responsible for the
Weekly Brief Widening deal spreads in March-April translated into an underperformance of Merger Arbitrage in early Q2. This is now largely behind us. The strategy recovered in May along with the tightening of deal spreads. Below we discuss the reasons
Market outlook Currencies fell again last week in CEE and, surprisingly, the CZK seemed to be the most vulnerable for most of the week in the region. Although this seems a bit odd and fundamentally not too justified, the CNB
Market outlook Currencies fell again last week in CEE and, surprisingly, the CZK seemed to be the most vulnerable for most of the week in the region. Although this seems a bit odd and fundamentally not too justified, the CNB
Regional view – Asia Our recommendation to be long the CNY versus the USD remains unchanged, as we still expect the pairing to slip to 6.3 over the next 6–12 months.
Regional view – Emerging Markets While not yet our base case, an AMLO presidency without congressional checks and balances is not priced in by financial and currency markets.
Regional view – United Kingdom "Our model predicts that England has a 66% chance of reaching the quarterfinals, a 31% probability of making the semifinals and an 8% chance of hoisting the trophy in Moscow."
UBS House View The US dollar hit 2018 highs against the euro and British pound last week, and also reached a 15-month high against the JPM index of emerging market currencies. We still believe economic fundamentals will lead to a
Investment Highlights ̴̴ week 21 Het sentiment op de financiële markten stond vooral in het teken van politieke gebeurtenissen. De begrotingsplannen van de Italiaanse regering zorgen voor onrust in de eurozone. Dit is vooral zichtbaar op de obligatiemarkten. Terwijl de
Global markets and multi-asset portfolios Our expectations are for GDP growth in Japan to remain satisfactorily above-trend: Despite some disappointing recent data releases, the country’s fundamental economic drivers remain healthy. Amid consistently disappointing inflation, the Bank of Japan seems likely
Global markets and multi-asset portfolios Our expectations are for GDP growth in Japan to remain satisfactorily above-trend: Despite some disappointing recent data releases, the country’s fundamental economic drivers remain healthy. Amid consistently disappointing inflation, the Bank of Japan seems likely
Active investing is ready to make a comeback A key feature of the current equity bull market has been the inexorable rise of passive strategies. These have gathered significant assets under management at the expense of active managers. This note
On the markets China and the US confirmed that they wanted to end the escalation in tariff threats and work towards a more comprehensive agreement. Donald Trump's protectionist rhetoric on the US current account deficit had increased concerns over a
Fixed Income Asset Allocation Insights May: 2018 After increasing our allocation to emerging markets (EM) debt and leveraged finance in prior months, we have left our target allocation unchanged. US economic data continues to trend favorably and trade war rhetoric
June 2018 Forecast update: growth peaking, inflation rising European forecast update: a frosty start to 2018 EM forecast update: turbulence interrupts a smooth flight Views at a glance
What was behind the recent US Yield curve flattening? Typically, yield curves flatten when a central bank tightens monetary policy, so in that sense the recent flattening has been quite normal. The important question is: Is the Fed able or willing
Time to explore currency strategies Forex strategies rely on a portfolio manager’s ability to exploit differences in the relative values of the world’s major currencies. To do this, specialists combine fundamental analysis and quantitative models to identify the currencies that
Week Ahead Next week (May 31), a first flash estimate of Eurozone inflation for the month of May will be published. In April, headline inflation in the Eurozone went down to +1.2% y/y, mostly because of a seasonal effect (shift
Executive Summary European institutional investors are adjusting their portfolios to a set of fast-changing conditions that include the return of volatility to global capital markets, the impending end of European Central Bank bond buying and the looming shift to a
The rally in emerging market (EM) equities over the past two years has been largely concentrated in a select group of new economy1 stocks, mainly within the technology/internet and healthcare areas, as well as China Ashare companies. Old economy stocks2
UBS House view Former CIA Director and commander of US forces in Afghanistan, David Petraeus, recently spoke with some of our clients about the strategic importance of “getting the big things right.” He made a powerful point. But while nobody
Q1 2018 Municipal bonds struggled during the first quarter, but they outperformed corporate bonds and the broad fixed income market. Performance benefited from supportive market technicals, including exceptionally low new issuance and strong demand. Municipal bonds’ historically low correlations with
Weekly Bond Bulletin Emerging market assets—particularly currencies—have come under pressure in recent weeks. Is this a trend reversal, or has the correction created opportunities?
Summary – Key messages From Goldilocks to Goldilost: new bear threats Macro: the current cycle still has room to run Asset allocation: Tactics required …
Exploring the pitfalls and opportunities of a rapidly evolving market In this report, we provide an overview of China’s onshore bond market: its size, composition, growth trajectory, recent performance and the inclusion of Renminbi (RMB) bonds in various global bond
Fixed Income Perspectives The return of volatility has been the dominant headline since the beginning of the year. Fast forward to May as investors watched the ten-year yield break through 3% and reach seven-year highs. The shape of the yield
US Watch The neutral federal funds rate, often referred to as r*, is the rate at which monetary policy is neither accommodative, nor restrictive The neutral rate is lower than in the past, and is likely to stay low Higher
Macro Weekly Economic conditions in the eurozone are stabilisingThis should be good for Europe Business confidence in the US on the rise in May Mixed Chinese data, Japan's GDP contracts
China Economic Monthly The People’s Bank of China announced a 1% reduction in the required reserve ratio in April. Our assessment of the required reserve system and Medium-term Lending Facilities suggests that this is a fine-tuning step. Loan growth at
Weekly Bond Bulletin Emerging market assets—particularly currencies—have come under pressure in recent weeks. Is this a trend reversal, or has the correction created opportunities?
Credit Markets Weekly PMI disappoints On Wednesday, the flash estimate of the manufacturing purchasing managers index (PMI) for the eurozone was released. While the reading of 55.5 points missed consensus expectations (56.1), which had called for stabilization after the steady
Spring is usually characterised by new growth. It is a time when much of the plant kingdom commences its annual development cycle and much of the animal kingdom also plans for expansion of the family unit or at least for
Spring is usually characterised by new growth. It is a time when much of the plant kingdom commences its annual development cycle and much of the animal kingdom also plans for expansion of the family unit or at least for
The Madness of Crowding Out
👤Northern Trust 🕔07:02, 25.May 2018Weekly Economic Commentary I will be working in Asia for most of the coming two weeks, and I am very much looking forward to it. What a great time to dig more deeply into events on the Korean peninsula, and
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