Eurozone policy mix remains incomplete The European Central Bank had already signalled its intentions and did not disappoint investors when, on 21 January, it announced a plan to acquire sovereign debt to a minimum of €60bn monthly up to September 2016.To understand what this level of quantitative easing can do to boost the eurozone economy, […]
Just as the US begins to emerge from the long balance sheet recession from which it has suffered since 2008, then another express train, this time from the emerging markets, hurtles into the station without warning. Admittedly, emerging market equities have underperformed developed equities since the fourth quarter of 2010. At first, this underperformance raised […]
The mere suggestion that, if certain conditions were met, the central bank could begin to reduce the pace of asset purchases in the fourth quarter led to a disorderly retreat by investors. Those asset classes most sensitive to the dollar, notably gold and emerging-market bonds (see last month’s Editorial), were particularly affected by the shift in expectations about the likely trajectory of […]
Essentially there are three regimes for the American currency. The depreciation regime This is the regime most frequently observed since the end of the Bretton Woods monetary system in August 1971. These phases of orderly depreciation generally correspond to periods when the global economy is expanding. Since the dollar is the currency of global trade finance, its availability in sufficient quantities […]
Three different regimes rule the US dollar: depreciation, crisis and secular uptrend. Few investors realise that we have shifted into a secular uptrend regime and this will have consequences on asset clases one should hold in a portfolio of investments. In this video, Yves Bonzon describes the regimes and asset classes to favour at the […]
Hedge funds may have been the winners in the bear market of 2002, but in the crisis of 2008 they were among the biggest losers. Locked in to losses by “gates” and other “side-pockets”, private investors have been disappointed by their performance in the market rally over the past four years. Today aversion to liquid […]
Yves Bonzon dissects the Cyprus crisis to understand how Europe deals with debt issues on a case by case basis. The existing situation opens interesting opportunities – as long as investors manage to hedge against government and nationalisation risks!
As the following chart shows, the growth in bank assets in Cyprus has become excessive as in Iceland, which caused a massive devaluation and capital controls that are still in place five years later. Although the talk is of taxation, what is really meant is the transfer of wealth from creditors to debtors, which is […]
The February 2013 issue of Perspectives is now available for downloading. In his editorial outlook, Chief Investment Officer Yves Bonzon explains that we are potentially at a major turning-point in the investment regime. Since the secular peak in developed equity markets in 2000, the correlation between gold and stocks, while unstable and complex, has had […]
In this article taken from Perspectives Special Edition 2013, Pictet’s CIO Yves Bonzon explains that inflation targeting as a tool of monetary policy, introduced in the early 80s under Paul Volcker, has finally been buried. Central banks are now moving towards a policy of targeting asset prices and other economic variables, primarily nominal GDP. Four […]
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