At a glance
- Deflationary pressures – and the associated risks to growth – are the common enemy faced by most economies across the globe. They are the motive behind the ongoing global easing cycle.
- A stronger US dollar and the resulting foreign exchange market volatility argue for greater differentiation amongst portfolios, in accordance with their reference currency. Hedging has become a must.
- Euro area investors will benefit from both liquidity injections and the materializing economic recovery – a positive outlook that supports our preference for risky assets over cash.
- A more balanced approach is required when it comes to US dollar- and Non-US dollar- based portfolios, given the more limited equity market upside.
- External debt levels and commodity intensity are dividing the emerging economies into two camps: those who can afford to loosen monetary policy (Asia) and those who are forced to keep rates high (Russia, Brazil).
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