“Wings of a Dove”
1. Rates are not going any lower
Finally, finally, the ECB removed their reference to lower rates in the opening statement. The omission of two small words – “or lower” – from the second line of the press release is a change in the ECB’s forward guidance. Although this action had been much discussed and debated by the market, the Bloomberg consensus was surprisingly split – 48% were expecting the removal whilst 52% weren’t. We have seen some comments that this is an effective tightening of monetary policy, but we think that’s probably going too far. It’s really just acknowledging that the Euro-area growth picture has improved, and indeed ECB President Mario Draghi said just that in his opening remarks during the press conference – risks to growth are now “broadly balanced”.
Andrew Acheson is Leader of the US Growth Team.
In this video, Andrew discusses his outlook for US Equity markets, including his insights on: 1.) how the recent shift in monetary policy might impact the US Equity markets and 2.) how inflation is impacting US Equities.
Marco Pirondini is Head of Equities, US.
In this video, Marco discusses his outlook for global equity markets, including his ideas on: 1.) expectations for the performance of global equities in a reflationary environment, (2.) the reaction of global equities to higher interest rates and (3.) drivers for US equities after the positive implications of the presidential election have been priced in.
Ken Taubes is Chief Investment Officer, US.
In this video, Ken discusses his outlook for US Fixed Income markets including his thoughts on: 1.) bond investment and inflation, (2.) the role of Central Bank policy in the next 12 months and (3.) segments expected to outperform in a rising inflation environment.
Mauro Ratto, Head of Emerging Markets
Outlook May 2017