BARCLAYS | We expect the turn of the calendar to bring a brighter tone to the TIPS market as many of the headwinds from 2015 begin to fade. The carry outlook should be positive after February, y/y headline CPI should move up sharply and concerns over a monetary policy error have receded with
the Fed’s dovish hike.
Allan Bollard via Caixin | Concerns about the impact of global trade and growth on environmental protection and sustainability, and vice versa, are longstanding and not without cause. Yet, the advancement of these 21st century priorities is not an either/or proposition. To the contrary, they can and must go hand in hand.
Janet Yellen’s delivery of a moderate rise in the Fed’s funds was bang in line with the market’s bets. She also conveyed a message of dovish commitment to thinking twice before engaging in any further monetary tightening. But despite her efforts to convince the markets that monetary policy will be back to business as usual, the cumbersome heritage of the liquidity glut will severely limit Yellen’s room for manoeuvre.
Most analysts think that the European stock markets, and particularly the Spanish bourse, have taken an excessive beating over the last few sessions. Now fund managers are recommending to take advantage of the recent correction to buy into these markets. In their opinion, the recovery in activity in the euro area will be accompanied by an improvement in share prices in the coming months.
UBS | This time around consensus is unanimous and the question is more about the FOMC’s wording and guidance than the actual rate hike, although we assume the Fed is going to hike 25bp tonight. What does this tightening mean for the European banks and insurers?
Chitra Subramaniam | The very talented Swiss artist Patrick Chapatte’s 2006 cartoon to mark the start of the international climate talks in Nairobi in November 2006 could well have been repeated for the recently concluded climate talks in Paris. Nobody is quite sure what was achieved, but everyone is relieved that talks didn’t crash.
BARCLAYS | The final count of the votes confirmed a super – majority (two – thirds of the seats) in the National Assembly for the opposition . The result exceeded the market ’s expectations of a simple majority and, in our view, proves that it has been under estimating the probabilities of a political transition.
The Paris climate change summit (COP21) felt like the last opportunity to curb the threat of climate change and what was at stake, and remains so, is the world economy. But fixing the global target for maximum warming at 1.5C, when a minimum of 2C was seen as necessary, and an optimal scenario of 4C had been considered, does not appear to meet expectations. Particularly if the agreement does nothing to pave the the way to achieving this.
Analysts and markets alike are already discounting a 25 basis points rise in the Fed’s core rates this week. So investors’ reaction will depend largely on Janet Yellen’s message regarding future rate hikes. A vague gradualism no longer matches the kind of unequivocal commitment the markets are waiting for. Anything short of this could fuel general volatility and unrest.
The world, mostly Latin America governments lined up with social markets economies and the US, like Mexico, Peru, Colombia or Chile, have welcomed the victories of anti populist forces in Argentina and Venezuela. In a run-off election on November 22, voters in Argentina elected centrist Mauricio Macri to succeed peronist Cristina Fernandez de Kirchner, with 51.4% of the vote. In Venezuela, the opposition won a two-thirds majority of 112 seats in the 167-seat National Assembly, 67% of the seats, despite winning only 56% of the popular vote.