Aug 25, 2016
The main topic on financial markets remains the U.S. Federal Reserve’s interest rate policy in the run-up to Fed Governor Janet Yellen’s speech at the central banker symposium in Jackson Hole. A beneficiary of interest rate speculations is the U.S. dollar. Some market players are betting on the possibility that Yellen signals an early rate hike on Friday, following hawkish comments from other high-ranking Fed members.
Aug 24, 2016
Inflation remains subdued and the US presidential election in November could prove another blow to the postwar world order. The Federal Reserve is thus unlikely to raise rates before voting day. However, a Hillary Clinton win would signal continuity and raise the chance of a December rate hike – especially, if the economy and the stock market maintain their current upbeat tone.
Aug 24, 2016
European stock markets benefited from relatively solid economic data. Latest survey results showed that corporates seem to have digested the Brexit shock better than expected. According to Markit Economics the preliminary purchasing manager index (PMI) improved 0.1 to 53.3 points reaching the highest level in seven months.
Aug 23, 2016
While recent comments of various U.S. Federal Reserve members have frightened off equity markets, the U.S. dollar in an initial reaction benefited from speculations about a sooner-than-anticipated increase in key interest rates in the United States. Investors will now focus on the annual international meeting of central bankers in Jackson Hole and eagerly await any signals about the Fed’s future rate hike timing, when Fed Governor Janet Yellen will speak on Friday.
Aug 17, 2016
During January’s turmoil, we undertook strategic purchases of high yield bonds. The position has rallied strongly since and will thus likely be trimmed back to our neutral quota again soon. Still, supported by the monetary policy-driven hunt for yield, as well as a brightening global economic outlook more recently, the asset class will remain attractive for diversified portfolios.