Value is hard to find, inflation is set to rear its head and quantitative easing is tapering. That combination has led Australian asset owners to expect only moderate returns for 2018.
Tag : qe
In the first of a series of articles on the fixed income outlook for this year, fund managers say bond investors are not pricing sufficient inflation into their expectations.
The main focus in early 2017 will be on the US, but may soon shift to concerns about Europe. Meanwhile, portfolio strategies are still being driven by ultra-low yields and high uncertainty.
Negative rates have failed to spur domestic demand, and while institutions have been driven to invest more offshore, they now face other issues, says Mark Konyn of insurer AIA.
Investors saw the latest round of stimulus in Japan as disappointing; it also highlights problems faced by other economies, says Paul Markham of UK fund house Newton.
CLSA’s global equity strategist, Chris Wood, says Kuroda has set the wrong inflation target and is impoverishing households, but suspects he will still extend quantitative easing.
Likening index-hugging investors to wildebeests, Richard Fisher, just-retired head of the Dallas Federal Reserve, says the central bank won’t get in the way of the lions.
Now that central bankers seem comfortable with quantitative easing, there is likely to be more of it, says Curt Custard, head of global investment solutions at the Swiss firm.
Japan's quantitative easing and pension asset purchase measures may boost domestic and foreign stocks, but the export of deflation is seen a potential issue, particularly for Korea and Europe.
Stimulus policies and expected quantitative easing from the European Central Bank are likely to boost growth in emerging markets and feed the search for yield in Asia, argue investors.
Mohamed El-Erian, CEO and co-CIO at Pimco, explains why emerging markets remain vulnerable to volatility even if they still exhibit strong fundamentals.
The withdrawal of investment banks as market-makers could cause problems if bond investors rush for the exits amid QE tapering, but BlueBay sees continued flows.
