News

Argentina: how recent events shape the investment outlook

Recent update on Argentina: Government’s decision to freeze energy prices and suspend VAT on certain products will complicate fiscal metrics. The country is likely to miss the IMF target of a primary balance for 2019. However, the IMF could disburse the September tranche of financial assistance, although conviction levels are low. 

Argentina: election surprise amplifies market and political risks

Argentina’s primary elections: Opposition candidate Alberto Fernandez won by largerthan-expected margin against President Macri. At this point, markets price in Fernandez’s victory in October elections. 

US-China trade war: walking a tightrope

Recent escalation: Donald Trump proposed additional 10% tariffs on a further US$300 billion worth of Chinese imports from 1 September. This is surprising, given that the two countries appeared to have found some common ground at the G20 meeting in June.However, the truce was short-lived and China responded with its own set of measures in form of a suspension of US agricultural imports and currency devaluation, which could further escalate the situation.

Global Asset Class Spotlights - Top-Down Quarterly Assessment

Top Down Quarterly Assessment

Global Asset Class Spotlights - Top Down Quarterly Assessment

Central banks seems to be very concerned about the slowdown in the economic cycle sparked by trade tensions. As a consequence, they have been intensifying their communications about their willingness to act.

Seek high yield opportunities, but be aware of liquidity conditions

Low rates and accommodative central bank policies translate into lower funding costs and easier financial conditions for HY companies.

Emerging Markets Charts & Views - Finding a balance between easing central banks and an uncertain scenario

The recent dovishness from the Fed, a benign inflation environment and the easing in global financial conditions continue to support a goldilocks environment for Emerging Markets (EM) assets. On the risks side, trade disputes appear to be softening as we approach the USpresidential campaign. But the existing tariffs are weighing on the corporate earnings, with mixed prospects across regions as some countries are also benefitting from a restructuring of the global supply chain.

Global Investment Views - August 2019 - CIO Views

The journey from market complacency to awareness of fragilities is in full swing, and the market correction in May is part of that, as is the recent recovery fuelled by dovish Central Banks (CB). Aware investors should recognise that the late cycle phase and mature market trends require improving fundamentals and positive political events to deliver sustainable uptrends in risk assets. But, it is difficult to see such improvements happening in the short term.

Global Investment Views - August 2019