With banks using negative interest rates and their stocks plummeting, many are wondering if the world is headed into another recession. Though things may seem grim, the truth is that another recession seems to be unlikely.
Since 2011, Brazilian assets have re-priced to the downside. Given the size of the adjustment – both in commodities and assets – the question is whether Brazil is now presenting attractive investment opportunities.
Nikko Asset Management's Global Investment Committee met on March 29th and updated our intermediate-term house view on the global economic backdrop, central bank policies, financial markets and investment strategy advice.
We expect June and December Fed hikes, but only mild further easing ahead for the BOJ and ECB. Meanwhile, we expect oil prices to creep higher through 2016 despite the stronger USD due to relatively firm economic developments in China and the G-3.
We expect that global equity and bond investing will be positive for Yen based investors due to Yen weakness, but for USD based investors, we are taking only a neutral stance on global equities due to a cautious forecast for US equities, whereas we are positive on Asia-Pac ex Japan, Japan and Europe. Meanwhile, we are moderately negative on bonds in each region when measured in USD terms, so we underweight them.
Despite seemingly a multitude of worries over the potential for a slowdown in US growth, the growing signs of weakness in Japan, the arrival of an industrial recession in Europe and the uncertainty over BREXIT, financial markets have arguably performed remarkably well over recent months.
On March 10, the European Central Bank (ECB) delivered what is commonly referred to in market parlance as the ‘bazooka’ – a stimulus programme well beyond market expectations.
Our Singapore-based Fixed Income Portfolio Manager details the reasons for ASEAN’s recent rebound and why such should continue.
Although the current polls do not indicate a clear majority outcome, in this piece we will examine some of the issues that may cause sentiment to shift towards a Brexit, and what the UK leaving the European Union might mean for the UK and EU economies post breakup.
While a recession in the US is not our base scenario, the impact of such an event on credit exposure is worthy of consideration. In our historical analysis we've found that the driver of past recessions can provide important insight into which credit maturities are most attractive.
US monetary policy grows less independent as 2016 unfolds and risks to global growth abound in a rebalancing China, a deflationary struggle in Europe and whispers of a Brexit.
2016 began in complete panic, with risk assets including emerging markets (EMs) selling off deeply through the first few weeks of the year.
Our global strategist sheds light on how corporate profit margins are reflecting the continuing improvement of corporate governance in Japan.
We suspect that many market participants have viewed the major central banks’ various “extraordinary measures” that have been adopted since the financial crisis of 2007-8 as having been a good thing. Therefore they have perhaps – or most probably – been wrong-footed by the markets’ rather negative reaction to the promises of yet more QE / negative rates / more monetary experiments.
Our Global Credit staff in London detail their rationale behind concentrating on service sector exposure globally.
Volatility can provide excellent buying opportunities. Something which gets overlooked in the 'noise' of markets.
Our global equities team in Edinburgh explains their views on the prospects for their asset class.
As we have seen over the past year in the equity market, the more Beijing wants to exert control, the more it slips away. Is pragmatism going to trump ideology in Beijing? In the current environment, the PBOC letting the RMB free float might not be so unbelievable after all.
This policy change by the BOJ is a positive in terms of maintaining and strengthening the inflation expectations that have begun to flower.
In our view, the USD will soften when the Fed comes to accept the reality of slow-to-no growth globally and becomes more dovish in its language and approach.