Navigating Inflation and Policy Divergence in the US and Eurozone Markets
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👤AXA
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In the report titled "Patchy disinflation will trigger policy divergence," AXA Investment Managers assesses the nuanced inflation scenarios in the US and Eurozone markets. The US is witnessing a gradual softening of headline inflation; however, core improvement is slow due to a persistently tight labour market. Conversely, in the Eurozone, there's little indication of improvement in core inflation, likely necessitating a prolonged period of tightening from the European Central Bank.
Euro Strength, Market Risk Premia and Prudent Defensiveness
As a result of these contrasting inflation dynamics, a policy divergence between the two regions is anticipated to persist for several months, potentially bolstering the euro. Although recent turmoil in the banking sectors has subsided, it has nevertheless impacted market risk premia. AXA Investment Managers note a combination of factors maintaining risk factors' resilience amidst ongoing headwinds. However, they advocate a defensive posture as the most prudent approach for now given these challenges.
If you're interested in understanding more about the global inflation landscape and its impact on investment strategies, click 'Report' to delve deeper into AXA Investment Managers' comprehensive analysis.
By
👤AXA
