Our experts discuss the key challenges facing central banks in today’s environment.
For months we have favored equities over credit and credit over rates. This is predicated on an expectation of a broadening global growth, aided by expansionary policies and potential deregulation in the US, and undemanding valuations in equities relative to bonds.
Beyond the US we see a more nuanced regulatory landscape, shaped by the divergent domestic priorities of the largest developed- and developing markets. We compare the investment takeaways in Europe, where cross-border standards are being reset, and in China as the focus returns to reform.
In the short term, the expectation of less regulation is helping to build confidence in corporate America. But over a one- to three-year horizon the boost to growth could be meaningful, in combination with tax reform and infrastructure spending.
Our “Un-Making the Rules” roundtable participants chose these charts to illustrate the potential market implications of an easier regulatory environment in the US.
Key takeaways from the first round of the French presidential election, and a look ahead to the final round on May 7.
Reasons we remain positive on small- and midcap equities.
We believe investors should look beyond the headlines and toward the long term when it comes to investing in emerging markets.
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In the US, political developments and a weak core consumer price index (CPI) reading for April led to outperformance in rates and weakness in the US dollar. We believe recent softness in inflation is driven by transitory factors and we continue to expect two more rate hikes this year.
Each week the Fixed Income team releases its views on macro strategies including duration, country and currency, and sector strategies such as securitized debt, corporate credit, emerging markets debt, government/agency, and municipals.
The US Federal Reserve (Fed) kept policy unchanged at its meeting last week. The Federal Open Market Committee (FOMC) noted that recent weakness in growth is "likely to be transitory". We continue to expect two further rate hikes this year.
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