Capital Markets Outlook March 2016

Asset Class                        March 30th, 2016

  • USA
  • Equities –               Chinese growth concerns and Fed Fund speculation provide short term buying opportunities.  
  • Govt Bonds –         Mild fall in bond prices, but supported by yields.      

 

  • UK
  • Equities –               Pressure from referendum on EU membership.  
  • Govt Bonds –        Low yields offer no incentive to hold.
  • Currency –             Only gradual increase in interest rates to a low level permits currency downside.

 

  • Eurozone
  • Equities –               Struggling from strength of Euro.
  • Govt Bonds –         QE and deflation maintain support.
  • Currency –              Move to monetary easing aid currency’s to fall to fair value, in longer term

 

  • Japan
  • Equities –               Struggling from strength of Yen.
  • Govt Bonds –         Declared inflation target scares marginal government bond traders, negative interest rates support.
  • Currency –              Loose money, low growth and debt downgrades maintain pressure, in the longer term.

 

  • Rest of the World
  • Equities –                Potential to recover on internal rate cuts.
  • Commodities –      Difficult to make significant headway if US dollar appreciation, awaiting reduction in oil production investment.


Uncertainties

  •        Chinese military developments.
  •        Russia/Ukraine.
  •        Regulation of financial institutions and products.
  •        Religious extremism.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

11 − one =