12 Mars 2018

A lot of things have been improving in recent years and as a result the global economy is now in its best state in more than a decade. And markets have noticed, and adapted. Asset prices currently reflect a much healthier outlook for global growth and corporate profitability than a few years ago. Until the February turbulence, markets also kept on indicating that things continued to improve. As a result, risky assets and especially equities continued to rise.

26 Février 2018

The emotions of markets have created an interesting spectacle in recent weeks. The impressive moves in equity space and record jumps in volatility were yet another expression of the fact that markets will always have mysterious features that are very hard to fully understand. Such episodes of misbehaviour have always been around and help us all to stay humble.

05 Février 2018

Inflation may well be still missing in action, but the last couple of days our other long-term missing companion, volatility returned to the markets. Over the past five trading days global equities were down 1.7%, real estate 2.7% and the ten-year German bond yields rose another 12 basis points to reach the highest level since end-2015. Also the USD witnessed some important intra-day moves last week on comments from politicians and policy makers.

22 Janvier 2018

Optimism is on the rise. And it is not hard to see why. The global economy hasn’t been better in more than a decade with growth more balanced and synchronized than seen in a long time. And inflation remains well-behaved, while policy and political risks seem lower than in recent years.

18 Décembre 2017

We are approaching the end of the year. With snow falling from the sky and Christmas around the corner, a bit of reflection over a glass of wine or while sitting next to the fireplace makes sense. And for all of us, these reflections will be different. Life walks in unpredictable ways and brings separate surprises and disappointments for each one of us.

04 Décembre 2017

What will next year look like? We would all like to know and there are good reasons to expect it to be even better. Also, it probably will get a bit bumpier from a markets perspective, but that might not even be a bad thing. It needs to be managed, but also will create some opportunity.

Valentijn van Nieuwenhuijzen

20 Novembre 2017

The global economy is stronger than it has ever been over the last decade. Whatever role politicians and policy makers have played and whether they did damage or contributed positively will be debated for years to come. Rather than discussing our stance on this topic, it is important to realize that the strength of the economy is broadly acknowledged.

07 Novembre 2017

The complex nature of financial markets creates a need to develop ways of observing its behaviour, in order to better understand the market and its interaction with the socio-economic environment. When economics and politics diverge, it becomes even more important to understand the behavioural forces that can shape the market direction.

23 Octobre 2017

Yet another disappointing inflation report. Many had been looking forward to last week’s report on US consumer price inflation and hoped to find confirmation that price pressures were finally rebounding. After a soft patch in global inflation trends in the first half of the year, the Summer period brought back some life to inflation dynamics. As economic growth remained healthy and, in recent weeks, also positive surprises on economic data moved upwards again, the reflation-theme revived somewhat in global markets.

09 Octobre 2017

Yet another week full of political turmoil. The drive for independence in Catalonia, hurricane damage in Puerto Rico and raging Brexit debates in the UK all continue to create massive challenges for the governments in charge. In none of these cases it seems that political leadership has been very effective in resolving the tension (to put it mildly). Let’s hope that changes quickly, but let’s also realize that it might not be that important to markets how quickly these matters are calmed down. Markets have learned in recent years to look through the political fog.

25 Septembre 2017

After bolstering markets for most of the second half of last year, the reflation theme had actually dwindled during the first part of this year. Growth was still good and broadened out further, while politics turned for the better (or less worse). However, the resulting tightening in labour markets and rebounding corporate profits did not translate into stronger price pressures or rising wages. And without the “nominal” part of the economy coming back to life, the reflation narrative continued to look a bit crippled in recent months.

11 Septembre 2017

Investors are currently realizing that the levels at which markets trade make it more challenging to deliver attractive investment returns than in recent decades. Cash and savings rates remain extremely low and bond and equity prices have moved up so much that the potential for additional gains is being questioned by many. Also, and not for the first time in the last few years, markets are struggling to find the balance between economic fundamentals, the outlook for policymaking and (geo-)political risks.

28 Août 2017

US domestic politics have been more prominent over the past week, with President Trump again highlighting his shortcomings. The response to the Charlottesville riots, the disbanding of various business councils, the “new” Afghanistan policy and the ongoing dispute around the border wall all reinforce the notion of an administration that is becoming increasingly isolated.

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.