While equities have recently risen, yields on the bond market have weakened. The markets are being supported by increasing hopes of a “soft” landing for the economy. What are the chances of this scenario?
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Thrilling decisions before Christmas
This week, the financial markets are once again in for an exciting ride: The European Central Bank and the US Federal Reserve will decide to what extent interest rates will be raised again.
High uncertainty reduces potential for asset price increases
The environment for the financial markets remains highly uncertain. The further development of inflation and economic growth is not sufficiently foreseeable. This points to continued high fluctuations in asset prices.
Fed remains on course
The latest US labor market data suggest that the Fed will remain on its course of more restrictive monetary policy. “As long as job growth remains strong and unemployment and participation rates remain low, the Fed will maintain its basic restrictive stance”, writes Head Economist Gerhard Winzer in his market commentary.
Ten new determining factors for the capital market
The economic environment for the capital markets is subject to change as we speak. About one and a half years ago, the global economy shifted from recovery to boom, which was very advantageous for the markets. The features were strong, broadly based economic growth, low inflation, very supportive monetary policies, good earnings growth, and limited price fluctuations on the markets. We have now started leaving this best of all worlds (“Goldilocks scenario”) in more and more categories.
Market Monitor: Optimism on the rise
This week we held our monthly Investment Committee meeting. Although only little has changed with regard to the overall economic picture, we were having a few interesting discussions that we would now like to share with you.
The global economy based on the Goldilocks principle
The global economy is growing moderately, inflation is low, and the monetary policy is loose. This environment supports many asset classes from bonds to equities. The political uncertainty has been absorbed rather well so far too. Will this situation last?