The Federal Reserve (Fed)’s interest rate decision, press conference and quarterly forecasts will likely dominate the week. Last week’s US retail sales and consumer confidence releases complicated the picture for the Fed. A marked upward revision to April’s sales (and
Our views for the coming months After a strong start of the year, with EM sovereign bonds up 7.6%, EM corporate bonds up 6.8% and EM local bonds up 3.0% in USD terms, we expect carry to be the primary
ECB Council Meeting As expected, the Governing Council of the ECB did not decide to change key ECB interest rates at today's meeting. However, the guidance was changed somewhat surprisingly today. Whereas the ECB had previously promised the markets unchanged
We see income, or carry, reasserting itself as the key driver of bond market returns. Scott explains. Coupon income historically has contributed the lion’s share of total returns across global fixed income markets. Yet declining yields this year elevated the
European elections see relatively high turnout and fragmentation. Turnout surprised on the upside, at its highest in 20 years (50.5% versus 43% in 2014), suggesting that most Europeans are still interested in politics and Europe. The two historical formations –
Pause for thought Market sentiment at the beginning of this year stands in stark contrast to that of a year ago. Last year markets worried less about growth and more about inflation but this reversed as the year progressed. The
Elga suggests a few investment options that may benefit from a pick-up in European growth and any decline in geopolitical concerns. We continue to prefer a “barbell” approach to risk taking in the late-cycle stage: quality stocks, income-generating bonds and
Occasional Paper Series This paper summarises the outcomes of the analysis of the ECB Crypto-Assets Task Force. First, it proposes a characterisation of crypto-assets in the absence of a common definition and as a basis for the consistent analysis of
ECB Monetary Policy Events Table A.1 presents all the monetary policy events considered in our study. It shows the evolving pattern of the ECB meeting policy and the associated changes in policy communication. In this section, we point out these
Elga explains why politics pose the biggest risk to our base case that European growth should rebound in the second half of this year – and why the European Central Banks’s perceived lack of policy options is also a concern.
European survey and hard data present a mixed economic picture; meanwhile, political risks remain elevated intra-Europe and with the rest of the world. We expect a turn in the global industrial cycle to bolster growth in Europe over the coming
QMA’s Global Multi-Asset Solutions Group The global economy may slow further in early 2019, given lingering trade uncertainty, a continued slowdown in China, and the lagged impact of tighter financial conditions in late 2018. However, global growth is likely to
After a strong first quarter, risk assets continued their rally in April. Equity markets climbed across the regions, while high yield spreads narrowed further. This year’s rebound has been driven by accommodative central banks, the expectation of a recovery in
Back to Lower for Longer? On the back of the Fed’s dovish pivot, risk assets are off to a banner start with the MSCI All-Country World Index (on a local currency basis) and the S&P 500 indexes returning 12.4% and
Consequences for central banks I nflation never disappears completely. In history, there have been periods when it was dormant, but revivals have always been painful. What is striking at present is the inability of some countries to boost inflation despite
Eurozone heterogeneity remains an important constraint for the European Central Bank’s (ECB) transmission mechanism Significant regional differences in central bank liquidity provision/absorption and commercial bank liquidity utilisation make the implementation of a “one-size-fits-all” tiering-policy strategy challenging . The introduction of
Trade tensions between the U.S. and Europe may be heating up. Isabelle explains the potential impacts. We expect a recovery in Europe’s economy later in the year. But there’s a key risk to this base case of ours: Trade tensions
Mario Draghi normally goes to great lengths to avoid surprising markets. But after the ECB’s March meeting, he shifted course. He adjusted forward guidance by saying key interest rates would remain at their present levels for longer than previously assumed
Investors were worried about another rate hike. Now they’re expecting a cut. Financial market expectations in 2019 have pivoted from a potential Federal Reserve rate hike to a rate cut, alleviating what had been a significant risk for investors. If there
Monthly Investment Strategy With the “policy put” in place (dovish US Federal Reserve and European Central Bank, fiscal stimulus in China and Eurozone), we have been waiting for signs of a cyclical upswing… … getting us to focus on China
We have revised upwards our 2019 Chinese GDP forecast to 6.3% from 6.1%. A strong rebound in China’s March data showed the country’s economy grew in the first quarter (Q1) from a year earlier, defying expectations of a continued slowdown.
Key points We share our research on the potential impact from climate-related risks on three markets, aided by advances in data and climate science. The European Central Bank kept its policy unchanged and signalled the potential for more dovish moves.
UBS House View Weekly — 15 April 2019 “Whatever it takes.” These words of Mario Draghi’s marked the inflection point in the last recession and paved the way to the present economic recovery. But as the euro celebrates its 20th
First quarter earnings expectations look too pessimistic. The first quarter earnings season has kicked off with mixed signals from initial results. Overall, the growth momentum is expected to slow down from the strong run observed over the last couple of
Rick Rieder and Russ Brownback argue that despite the market turbulence witnessed in the past several months, as well as a dramatic policy reversal, we find ourselves at a moment of remarkable economic stability. That fact, along with greater policy
Asset Allocation Consensus Equities June 2019 on Youtube: https://t.co/WD3mMy1JgI
