Markets
The Dollar, Emerging Markets, and Volatility
A surging dollar could have significant implications for reflation, emerging markets, and volatility.
Tapering, The Return of Growth, and Oil's 7-Years High
Tapering is not yet an issue, growth is timidly coming back and oil is near 7 years high.
Market, Corporates and Central Banks’ View on Inflation
Commodity prices and CPI subcomponents continue to flag an increased risk of inflation.
Healthier Positioning, Green Politics, and Carbon Allowances
Positioning in the market has become less extreme, especially ahead of what has historically been a lower return period for the stock market.
Corporate Taxes, EM Tech, and New Investing Principles
We find the increased focus on corporate taxes to be a fair and necessary discussion to have, especially given the number of loopholes that corporates are currently benefiting from.
Gold Miners and Energy Alternatives
The reflation trade is still alive, gold miners may provide an outsized opportunity, and the low carbon emission economy is becoming an important long-term economic driver of prices.
Short-Term Inflation, Long-Term Unknown
Short-term vs long-term inflation expectations are telling two different stories about the fundamental strength of the economy.
The Acceleration of Retail Participation
Asset price performance has been quite solid across the board and the Yield Curve has continued its steepening, with rates in the long end getting closer to 2%.
The Risks to 2021 Consensus Outlook
The reflation narrative has become the overwhelming consensus view for 2021. This implies a weaker dollar, higher bond yields, and outperformance from emerging markets and commodities.
2020: Financial Markets in Retrospective
US Tech, Gold, and Bitcoin did very well, whilst the US Dollar and Crude Oil were the big losers of the year.
Two Possible Types of Reflation
Whilst the potential for inflation has been on the rise recently, we still feel it’s unlikely that we’ll see any undesired increase in price levels at least for the next year.
Financial Markets Post US Elections
What the US elections result has taken away from the reflationary narrative has been more than offset by the vaccines headlines.