Emerging Markets Economic Update: Growth, Inflation and Monetary Policy

Pioneer’s Head of Global Asset Allocation Research, Monica Defend, along with U.S. and Latin America Global Asset Allocation Research Economist, Annalisa Usardi, recently released an economic update on the Emerging Markets. Highlights from their report surrounding Latin America, specifically Brazil and Mexico, are below. To read the full report, click here. Continue reading

UK Forecast Update: Growth, Inflation and Monetary Policy

Pioneer’s Head of Global Asset Allocation Research, Monica Defend, along with Europe and EMEA Global Asset Allocation Research Senior Economist, Andrea Brasili, recently released an update on the UK economy. The update was based on the 2Q14 preliminary results for gross domestic product (GDP), which came in higher than expected. They expect growth above 3%, higher inflation in 2015, and a gradual shift in monetary policy towards higher rates. Highlights from their report are below. To read the full report, click here. Continue reading

“Whatever it Takes” Two Years Later: What’s New?

Today is the second anniversary of Mario Draghi’s “Whatever it takes” pronouncement during the darkest days for the euro. Let me share with you some thoughts on how that event probably changed the course of the Eurozone.

Draghi’s speech did what it was supposed to do – it preserved the euro and it calmed the economy and the financial markets – without costing a single euro. The most important measure of success is that after the speech, the Outright Monetary Transaction Program (OMT), which allowed the European Central Bank (ECB) to buy short-term bonds from euro governments, was not utilized even once. The bottom line: The speech and the program were nothing more than a communications initiative, albeit an extremely adept one.

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U.S. Forecast Update: Growth, Inflation and Central Bank Policy

Pioneer’s Head of Global Asset Allocation Research, Monica Defend, along with U.S. and Latin America Global Asset Allocation Research Economist, Annalisa Usardi, recently released an update on the U.S. economy. The update was based on the Bureau of Economic Analysis’ (BEA) release of the third and final estimates 1Q14 gross domestic product (GDP), which came in lower than expected. The forecast update focuses on three areas: growth, inflation and central bank policy. Below are some highlights from their report. To read the full report, click here. Continue reading

Bubbles Detector

Summer is time for vacation, and getting ready for a trip has become almost a ritual for me: pack bags for my large family, load the car, don’t forget the GPS and check weather conditions. The last two points, I believe, apply not only to planning a safe and comfortable personal trip, but also to navigating the financial markets.

The financial “weather” seems nice: volatility is extremely low across almost all asset classes, as a consequence of the extra-loose monetary policy. However, as with the weather, we are aware that financial conditions can rapidly change. History suggests that periods of exceptionally low volatility should be treated with skepticism, as they have usually preceded vicious market turmoil. Continue reading

EM Update: Central Banks & Monetary Policies

Pioneer’s Head of Global Asset Allocation Research, Monica Defend, recently released an in-depth macro report on Emerging Markets. Here are some of her updates on EM monetary policies. You will find a link to the full report at the end.


ASIA

  • China – The implementation of fiscal reform is proceeding as ten local governments will be allowed to issue bonds with full responsibility of repayment. Even though the economic slowdown would suggest a stronger monetary easing, in the ongoing process of liberating interest rates and increasing efficiency in credit allocation, monetary policy must remain prudent to prevent a return to the old model of allocation and growth. The latest reserve requirement ratio cut for some qualified banks supports this attitude of the People’s Bank of China.

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Seeking New Opportunities in Emerging Markets Debt

Yerlan Syzdykov, Head of Emerging Markets Bond & High Yield here at Pioneer Investments, recently shared his thoughts with London’s press on the challenges of investing in emerging market debt. I thought I would share them here with you as well. The following is a summary of his remarks:

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