Investors’ Outlook October 2021 “Envelopes please… and the winner is… Wall Street.” This is the result of our recent allocation review that saw us overweight US stocks at the expense of European ones. The slight change doesn’t alter our overall
IN SHORT Inflation concerns have picked up again as price pressures mount. Talks regarding tapering continue to intensify. Yields have surged globally following the more hawkish tone of central banks and questions regarding the transitory nature of inflation. Equity markets
CIO Views Markets responded to mixed data from the US and China and to the potential tapering from central banks. We are also seeing inflation (energy and food) and a deceleration in China. As a result, while staying neutral on
Nu het sterke economische herstel van China na de pandemie in gevaar komt door het debacle van Evergrande, moeten beleggers hun verdediging versterken. Er wordt steeds meer een strakker monetair beleid verwacht. De centrale banken blijven voorbereidingen treffen om de
BII Global weekly commentary We stay tactically pro-risk amid the broadening economic restart, with negative real rates supporting risk assets – as per our new nominal theme. The Fed signaled it will start to taper around the year-end. Its reluctance
A broad spectrum of central banks fear climate change could spark the next financial crisis. For this reason, regulators in Europe and the UK are already beginning to scrutinise banks’ resilience to climate change – looking into both the likely
5 minutes with UBP global fixed income: What do you think of the recent communications from central banks? In this new podcast, our experts Bernard McGrath and Mohammed Kazmi share their views and reflect on the upcoming June meetings.
European Gazette: As central banks move gingerly towards normalising monetary policy, a delicate balancing act is under way. They need to tighten policy – but neither too soon, nor too quickly. Indeed, the flattening of the US yield curve in
In hindsight, Jay Powell is probably very happy to have been so elusive at Jackson Hole on the timeline for “tapering” after the disappointing US job numbers for August. It is not the first time this year that payroll data
Forecast update: a touch of stagflation We still expect a robust recovery in the world economy, but the outlook has moved in a stagflationary direction as growth momentum fades and price pressures rise. Our forecast for global GDP growth is
Executive Summary Vaccine-driven reopenings propelled U.S. economic growth in the first half of this year, leading to a significant uptick in inflation. While PIMCO believes that today’s high levels of inflation will likely prove transitory, we believe the Federal Reserve
KEY TAKEAWAYS Markets can readily digest an orderly policy tightening. The US Federal Reserve (Fed) is determined to cement the recovery and will avoid preemptively raising rates. Tapering of asset purchases will take place first but this will be gradual
Global Investment Views The past weeks have confirmed that phase one of the ‘great recovery’ is now behind us. We have entered a new sequence: PMIs decelerating from their peaks and concerns about the spread of the Delta Covid19 variant
Executive Summary As inflation spiked in the second quarter of 2021, debate about its transitory or permanent nature became more heated. Yet, as is sometimes the case with broad controversies, a lack of definition goes with a lack of comprehension.
With Covid-19 top of mind, impacting both operations and investment strategies, the impact of the ongoing pandemic is the major theme running throughout. This includes an examination of adjustments made in response to the crisis and the impact on long-term
Moving toward integrating social and environmental issues. Building back greener, fairer, and more sustainable is not just the goal of governments and companies—central banks have also begun to incorporate issues such as employment equality and climate change into their policies. What
More efficient money transfers will likely bring down rates. Central bank digital currencies are the next big evolution of the current payment system. As well as addressing long‑standing issues with the fiat money system and boosting financial inclusion, CBDCs will
What kind of an asset is it? Its origins: how did decentralised finance give birth to blockchain database? How a number of ESG concerns are related to the way different cryptocurrencies have been structured and programmed to function? What's next
Global Asset Allocation: The View From Europe Following a shaky start to its vaccine rollout, Europe appears to be recovering as businesses are reopening and lockdowns continue to ease in some areas. As the European Central Bank debates the extension
The Covid-19 crisis has transformed the world with far reaching consequences that markets are now starting to assess. The most important one being what will be left of the Great Recovery following the crisis. Different narratives are evolving at this
Below is a brief recap of the views of Tim Ng and Tom Hollenberg, fixed income portfolio managers and members of Capital’s interest rates team, regarding the Fed’s announcement on 16th June. Fed officials projected two interest rate increases by
Market weekly: Thanks to central bank largesse, corporate bond markets weathered the depth of the Covid crisis well. Risks to credit markets today appear low with gradually improving fundamentals, neutral central bank policy and no major supply-demand imbalances. Listen to
Evidence continues to mount that a combination of vaccinations and stimulus are creating some of the strongest economic growth data in decades. Even so, the Fed remains committed to easy monetary policy until unemployment falls further and inflation materializes.
The coordinated central bank response to the COVID-19 crisis has pushed real yields in the developed world into firmly negative territory. While this policy action prevented a prolonged recession, it has left fixed-income investors grappling with an asset class where
What are Central Bank Digital Currencies (CBDCs)? What is the impetus behind CBDCs when the ethos of crypto goes against the very role of central banks? How will CBDCs affect the widespread use of cryptocurrencies or the need for crypto
In its meeting last week, the Bank of Japan (BoJ) announced several changes in its monetary policy framework, but also confirmed its policy to keep yields under control. While other government bond markets have seen quite some volatility in the …
Distinguishing between short and long-term issues Weekly investment update Keeping a weekly column like this one going brings home the sense of immediacy that frequently grips financial markets and that can fuel short-term spikes or dips as we have seen
This article assesses the communication of the European Central Bank (ECB) using Natural Language Processing (NLP) techniques. We show the evolution of discourse over time and capture the main themes of interest for the central bank that go beyond its traditional mandate of maintaining price stability, enlightening …
2021 began with renewed bouts of volatility with a tug of war emerging between concerns over slow vaccine rollouts especially on the continent and delays in US fiscal support against positive earnings trends.
As the largest vaccination programme in history commences, risk markets appear to be ignoring the logistical challenges or near-term downside growth risks from tighter lockdowns imposed after infection rates in Northern Hemisphere countries soared over the winter. With the S&P at or close to all-time highs and many …
Central banks in a pickle Uncommon truths We think tapering is off the agenda for 2021 and believe that central banks may purchase increasing amounts of assets. That may be good for risk assets this year but we worry where
The success of the Federal Reserve’s emergency intervention in March 2020 played a crucial role in stabilizing and improving liquidity in U.S. credit markets. The cessation of the Fed’s corporate credit facilities, in our opinion, lowers the risk of unintended imbalances within credit markets that could potentially …
For many years nominal interest rates, largely from developed markets, served the dual purpose of providing stable income and diversification benefits in many multi asset portfolios. Yet with yields on these assets testing the zero boundary, the allure to owning them looks increasingly tarnished. A small move in price can wipe out your income for the year.
Interest rates are at an all-time low, and even if inflation eventually picks up, it could take some time. Central banks, the first pillar of the investment cycle, are adjusting and are resolutely accompanying governments in this final battle against
Investment Insights Key takeaways Global corporate bonds have recovered strongly since the peak of the sell-off experienced in March. With credit spreads having tightened considerably since then, I believe the rally was justified for technical reasons due to unprecedented levels
T. Rowe Price Insights from our Global Fixed Income Team How the prospect of further monetary easing could impact bond markets. Central banks are not done yet. With economic recoveries under threat, several developed market central banks, including the European
While historically most asset managers have separated their stewardship capabilities from their investment processes, we believe that this will no longer suffice. Engagements and proxy voting decisions should be made in consultation with investment decision makers as it is the
T. Rowe Price Insights on Global Markets Our portfolio managers see selective potential in a range of asset classes. Even for those of us who saw reasons for hope this past spring, the market’s resilience in the face of the
#47 Tomorrow our event calendar is filled with five webinars! If you have spare time tomorrow, don’t miss out on an interesting session. Furthermore, next week December starts and this month has lots of interesting webinars as well. For example,
Column by Hendrik Tuch, Head of Fixed Income “Interest rates and yield curves have seen quite some volatility in the last few weeks as markets digested the election news and the coronavirus headlines. Ahead of the US elections, many investors
Of course, the impact of next week’s elections in the US goes well beyond the economic and financial realm, but from our narrow angle, we will follow the results across two dimensions. One is volatility: whether a winner emerges quickly
Gold Correction U.S. dollar strength kept pressure on gold throughout September. The dollar, as measured by the U.S. Dollar Index (DXY),1 trended higher as the stock market trended lower from its all-time highs. The pandemic stimulus-driven bull market looks to
Webinar – New world, new challenges: Rethinking the investment landscape 2020 has been a year like no other. A global health crisis, as yet without an end in sight, that has transformed the world and is accelerating change across societies.
Al drukt de covid-19 pandemie de economische groei en inflatieverwachtingen, centrale banken en overheden zetten hier steeds verdergaande stimuleringsmaatregelen tegenover. In combinatie met trends als deglobalisering, kan dit een structurele kanteling in gang zetten die de inflatie juist op een
Spotlight In early-September, the US Federal Reserve Chair Jerome Powell announced a shift in the inflation containment policy regime that had been in place since the 1970s. Recall how, facing rapidly rising and eventually double-digit inflation, then Fed Chair Paul
Abenomics at a glance Referring to the economic policies advocated by Prime Minister Shinzo Abe since his victory in the 2012 general election, Abenomics consists of three arrows: aggressive monetary policies, fiscal consolidation and a growth strategy. The key aim
Market Flash All eyes were on central banks. As expected, the Fed left its rates unchanged. It even said they would not move until inflation rose above 2% and stayed there for some time, a situation it does not expect
Key points The divergence between a decisive Fed and a more hesitant ECB is an interesting debate but it hides the fact that on both sides of the Atlantic monetary policy through its traditional transmission channels is facing diminishing returns.
The Federal Reserve today announced an important change in its framework for conducting monetary policy in order to achieve its “statutory mandate from the Congress of promoting maximum employment, stable prices, and moderate long-term interest rates.” One of the main
The Federal Reserve today announced an important change in its framework for conducting monetary policy in order to achieve its “statutory mandate from the Congress of promoting maximum employment, stable prices, and moderate long-term interest rates.” One of the main
