What will 2015 hold for fixed income? 18/12/2014 At the start of 2014, there was overwhelming consensus on the likely direction of fixed income markets. The majority of asset allocators and fixed income managers had concluded that interest rates would inevitably rise, therefore short duration was the correct positioning. The subsequent lurch down in the global growth outlook, and the resulting downward pressure on bond yields, came as a nasty surprise and many investors found themselves on the wrong side of the trade.
Three cheers for Rothschild's Kevin Gardiner 12/12/2014 It seems that at least one investment strategist shares the view expressed in thewealthnet about the usefulness of annual investment outlooks (see thewealthnet 11/12/2014). Kevin Gardiner, the global investment strategist for Rothschild’s wealth management business, argues that investment policy is not conditioned by calendar changes. Instead, it forms of part of a continuum. And this makes annual investment outlooks much less relevant.
Russia – time to invest or time to avoid? 11/12/2014 The outlook for Russia appears bleak: The MSCI Russia is down around 40 percent for the year to date. The currency continues to slide and there appears to be no end in sight for the country’s economic woes. Newton’s Jason Pidcock argues that Russia is on the brink of economic, political and territorial collapse, but is there an argument that the stock market is now so cheap there may be opportunities for a contrarian investor?
10 Outrageous Predictions for 2015 by Saxo Bank 10/12/2014 A UK exit from the EU after a landslide gain by the UK Independence Party in the country’s general election, the quitting by Mario Draghi of the European Central Bank to become Italian president and a UK housing market crash are among this year's "outrageous predictions" by Saxo Bank.
What is next for Japan? 25/11/2014 Ever since his election in December 2012, Japan’s Prime Minister Abe has put into action an ambitious economic revival strategy articulated around three arrows: monetary policy with massive liquidity injections, fiscal policy with expansionary additional spending and economic policy with structural reforms. Of the three arrows, only the monetary policy has fully lived up to expectations with a massive depreciation of the yen of around 30 percent. Support from the fiscal policy has been diluted by hiking VAT in April 2014 from five to eight percent that counterbalanced the benefit of supplementary public expenses, while the third arrow of structural reforms has been morphed into a policy of thousand needles of positive but not game changing decisions. Labour reforms have been timid with a continued reluctance to create more flexibility for workers in large corporations, as well as to open Japan to needed immigration workers. The trade negotiations within the Trans Pacific Partnership – a US-led trade agreement involving 11 major pacific economies - have come to a standstill.
Japan - are professional investors backing Abenomics? 24/11/2014 Japanese Prime Minister Shinzo Abe has now dissolved parliament ahead of a snap election for December. Abe has promised new measures to stimulate the consumer economy, plus an extension of the current quantitative easing package. The election has been labelled a vote on Abenomics, an endorsement – or otherwise – of the present government’s economic policies.
Japan – This time is different, or is it? 18/11/2014 Investors seldom feel like talking about Japan. A geographic outlier relative to other global developed markets, the world’s third largest economy has many times emitted false recovery signals. It is hard to fathom that not too long ago, keiretsus, Japanese conglomerates, were dominant global players. Japan’s weighting in the MSCI World Index in 1987 was roughly 40 percent, twice that of Europe and 10 percent higher that of the US. Today its weighting in the popular market capitalisation equity index is around 8 percent. After 20 years of stagnation we believe that the current combination of policy and reform – Abenomics - may just be creating the right conditions for the economy to reinvent itself and become a lot more relevant on a global scale.