The announcement by the US President, Donald Trump, to levy import tariffs on steel (25%) and aluminium (10%) has made waves. Can the favourable economic environment of boom, low inflation, and gradual reduction of the supportive monetary policy be toppled?
The economic environment for Italy remains challenging. The fundamental problem is the low economic growth. Although the composition of the future government is still unclear, the party programs imply a persistent reform deadlock.
The 4th BBVA Latin American Local Markets Conference in London gave me the chance to speak in detail with some local Latin American representatives. In the following, I would like to share some of the insights I gained from these conversations and the narratives that may affect 2018.
Equity indices have undergone a global correction in the past days. The Dow Jones index has shed more than 10% from its January high. What is the macro-economic reason for the correction?
In the past two days, the stock exchanges, spearheaded by the New York Stock Exchange, have shed the entire previous gains of 2018. Even last week, inflation worries had started to weigh on the markets. But the recent reaction was extraordinarily strong, with experts likening it to the excellent employment report in the US.
Dr. Ulrich Eberl is one of the most renowned German-speaking scientific journalists and futurologists. He holds a PhD in biophysics from the Technical University of Munich and was Head of Global Communication for research and future trends for 20 years at Siemens.
The current environment is very positive for the capital markets: strong growth, low inflation, supportive monetary policies, good earnings growth, and low volatilities, i.e. fluctuations. Also, the numerous risks have not had a significantly negative impact on prices. However, the phase of rising prices started as early as March 2009. This environment implies that any change in the relevant parameters such as growth, inflation, and monetary policy would be tantamount to deterioration, given that improvement is not possible anymore. The most important question asked by investors at the outset of 2018 is therefore whether this positive environment is still here to stay.
2017 is drawing to an end, and the bottom line is positive. The outcome is significantly better than we had expected. Since the financial crisis in 2008, the global economy has never expanded more quickly and especially concertedly than in 2017. Also, inflation has surprised on the downside, falling short yet again of the expectations held by central banks and analysts.
Guest author: Jenny Teng, Senior Fund Manager
Jenny Teng is senior fund manager in the equity team of Erste AM. Born in China she is employed since 2008 at ERSTE-SPARINVEST and responsible for the Asian equity markets.
Long enough we have heard about the depreciation of Chinese currency Renmimbi (RMB), but this year RMB has showed rather unusual movements.
Q3 is drawing to its end. Traditionally, this heralds the development of a strategy for the next year, an important part of which is the creation of scenarios. On the basis of the status quo, we have drawn up three further different scenarios in this blog entry.