- Brexit still weighs on GBP, but the situation on rates and equity could normalise
Brexit still weighs on GBP, but the situation on rates and equity could normalise
Wednesday 12 February 2020
Research / Market, Investment Talks
Now that the United Kingdom is officially out of the EU, a new phase has opened up, during which UK officials will have to negotiate a trade deal with the EU to avoid a ‘Brexit cliff edge’ at the end of 2020. The available time span is short, but an agreement is possible on either a trade deal, another extension or some mixture of the two. The negotiations should be simplified now the UK is able to rely on a solid parliamentary majority, while on the EU side there can no longer be any hope that the UK will remain in the EU.
ECB QE Monitor- January 2020
As of October 30, 2019, the Fed lowered its key rate for the third time in 2019. The ECB cut its deposit rate in September to a record low -0.5% from -0.4% while introducing a two-tier system to preserve bank’s profitability.
Global Investment Views - February 2020
At the start of the 2020s, markets continued to be dominated by geopolitical issues, with short-lived Iran tensions at the forefront initially, followed by the news regarding a phase one trade deal between the US and China. Now, growth expectations are becoming the main driver of the market. That’s why the recent volatility due to the news about the spreading of the corona virus in China is higher than in the case of US-Iran tensions, as the epidemic could harm China (and global growth) if not contained soon (not our base case at the moment). Other than this issue, recent data point to a ‘so far, so good’ assessment as Germany has avoided a recession and the Euro area is bottoming out. Inflation uptrends are materialising to some extent, but risks appear to be limited and the overall inflation outlook remains benign. Central banks are likely to continue to pause on policy changes, which should help to maintain dovish financial conditions across regions. Therefore, in the search for further growth, attention is globally moving towards fiscal measures: Japanese stimulus package; approval of 2020 Budget Laws for Indonesia, the Philippines and India; and hopes for support in Germany, the UK and broader Europe (€1tn European Green Deal).
ESG Investing in Corporate Bonds: Mind the Gap
As investors gradually integrate ESG into their stock and bond portfolios, it becomes crucial for Amundi, as a leading responsible investor, to gain a deep understanding of the various facets of ESG and its impacts on different asset classes. Therefore, ESG has been a top priority for Amundi research teams.