Are we now on the other side of the recent price decline in the risky asset classes? Global equities, bonds with default risk, and emerging markets have been recording significant gains. Has the fundamental situation improved, or had the assets excessively negative events priced in?
The beginning of Q4 is the time for an outlook on the coming year. At first we want to establish the determining factors for the economic activity and the markets. On this basis, we will introduce three scenarios.
The current refugee crisis is immense. Estimates expect more than a million people to apply for asylum this year in the European Union; i.e. we are talking about 0.2% in terms of total population. This would suggest that the immigration can be handled if all the countries cooperate.
Interest rate decision by the Fed Tomorrow, Thursday 17 September 2015, the federal Open Market Committee (FOMC) of the US central bank Fed will be taking an important decision. Is the Fed funds rate to be raised or not? The financial markets have accorded this decision a particularly important role. After all, the rate hike […]
Earlier this year the president of the ECB said we would have to get used to elevated levels of volatility. And it is true, the market environment has changed. The years 2009 to 2014 were subject to an asset price reflation regime. High rates of return were coupled with low volatility. This relationship has now […]
Market correction Equities, bonds affected by default risk, commodities, and emerging markets currencies are currently subject to corrections, which, noticeably, have now gone beyond the purview of emerging markets: while the emerging markets equity index declined by almost 6% (Performance-Data Source: Bloomberg, MSCI) last week, the index for developed markets lost 5.3% (Performance-Data Source: Bloomberg, […]
On 11 August China devalued its currency by 1.9% relative to the US Dollar and announced that in the future it would expose the exchange rate of the Renminbi to the forces of supply and demand on the foreign exchange market. In a press conference the Central Bank did say, however, that it would continue […]
Commodity prices have fallen drastically since the beginning of July. The commodity price index provided by Bloomberg has fallen by nearly 12%. In fact, many commodity prices are locked in a bear market. The index is currently almost 50% below the level of the beginning of 2011. Over the same period the currencies of emerging […]
Global GDP growth has probably only increased marginally in Q2 after the very weak Q1. Economic activity has thus remained disappointingly weak on a global scale.
The negotiations between Iran and the UN veto powers plus Germany were concluded successfully on Tuesday, 14 July. Iran will curtail its nuclear programme. In exchange, the international economic sanctions will be reduced. The result is remarkable in so far as the interests of the P5+1 (the five permanent members of the UN Security Council […]
