24 Juillet 2017

At the same time ample liquidity provision, brightening growth prospects and a reduction of tail risks have caused many asset prices to trend higher in recent years. This raises questions how much additional price rises can still be expected and makes some people wondering what type of returns can still be expected from global capital markets. If everything is expensive you might at best be able to reduce your investment risk through smart portfolio diversification, but escaping from a low return future would become close to impossible.

17 Juillet 2017

Markets remain in full swing. Bond markets are correcting as a "taper tantrum"-light is disrupting European government bond markets. Other market segments are obviously also impacted by these moves, but the degree of contagion into other asset classes or regions is clearly less dramatic than what was seen at the real taper tantrum of four years ago.

26 Juin 2017

Inflation is everywhere, except in the official consumer price statistics. Since crisis fighting by central banks forced them to cut rates to zero and embark on the unconventional path of QE talk of inflation “risks” has been widespread. Nearly a decade further in time it is clear that the behaviour of central banks has had a substantial influence on asset prices.

12 Juin 2017

Markets have been calm and we have all discussed extensively what to think or how (not) to worry about this. For those looking for a bit more action there is always hope. Since history only rimes and is not reliable in repeating itself exactly, it might well be that new political or policy drama might be successful where Brexit or the US and the French elections have failed.

29 Mai 2017

Again are we remembered this week that the horror of terror is long but beaten. Our thoughts go out to all persons and families impacted by the drama in Manchester. This era of intolerance and aggression is often hard to digest and equally challenging to understand. This holds for most in society, in politics and in markets. Sadly enough these types of shocks have now also become so regular that markets are less shocked by them than a few years ago.

22 Mai 2017

It’s funny how the mind works. First we fear secular stagnation, then we worry about central banks tightening policy. First we fear lack of productivity growth then we worry about job destruction from technological disruption. First we fear political shocks impacting markets then we worry about the lack of volatility in markets.

26 Avril 2017

Market sentiment faded a bit over the week as risky assets lost some ground and bond yields continued to drift lower. Equities, fixed income spread products and commodities all lost some ground. With exception of the latter, however, all asset classes have still a positive year-to-date performance.

10 Avril 2017

Markets surround the economy in an effort to facilitate a smooth flow of capital to those parts of the system that can put it to work most productively. They create better access to capital for those with ideas but without savings and improve incentives to allocate the available pool capital efficiently.

27 Mars 2017

It is hard to keep up. And it is hard to ignore. Politics are far from the only thing of importance for our lives, the economy we work in or the markets that drive our investment returns. And still, our emotional impulses almost force us to follow what happens in the political arena and our mind automatically paints a picture of what this might mean for the future. Those of us who understand well how we think, who appreciate the complexity of the way we take decisions, will aim to mitigate the influence of an emotional response to the latest political newsflash.

13 Mars 2017

Not too much news on the state of global markets. Macro numbers remain strong, politics remain noisy and investor risk taking is building on the back of the equity market rally. Still, no broad-based signs of excessive optimism visible as fears over political shocks lingers.

27 Février 2017

Risky assets witnessed a good start of the year. Despite a high degree of political uncertainty, equities but also real estate and commodities printed a positive performance. Even the performance of German Bunds will at the end of today be slightly positive.

13 Février 2017

The battle continues. The battle between good economic news and rising political uncertainty. Markets need to keep a close eye on the balance between these two forces to judge how upside and downside risks are evolving. On top of that market behaviour itself could easily generate feedback loops to the economic or political reality on the ground,

Valentijn van Nieuwenhuijzen

30 Janvier 2017

It seems to be all about politics these days, but despite its importance it should never be overlooked how much more is at play. We live in a world where political headlines continuously interact with market sentiment and market dynamics provide a direct channel by which emotions of the crowd are transported to the underlying economy. Moreover, the state of the economy is actually also an important driver of both market behaviour and voter preferences and thereby provides another feedback loop into politics and the mood on financial markets. Actually, politics, markets and the real economy are in constant mutual interaction and they influence each other to varying degrees over time and with unstable causality. On top of that, these factors are only a high level simplification of all the forces at play in our globally integrated socio-economic system. 

Valentijn van Nieuwenhuijzen

16 Janvier 2017

Many of us have been surprised by last year’s political events. Maybe even more have been amazed by the market’s response to the political shock waves. And almost all of us are now lost on how to interpret the eye-catching flow of tweets from US president-elect Trump. And next to all this populism, geopolitical risks and fears over migration, technological disruption and European fragmentation all seem to be building further. The insecurity that this creates in society confuses many and creates a widely shared impression that it is more impossible than ever to foresee what type of negative shocks will hit us in 2017. But negative they will, that seems one of the few things that the consensus amongst economists and political analysts is clear on.