September meetings of the quatuor Central banks tend to suggest that policymakers realize that negative interest rate policies are not an optimal solution. The European Central Bank disappointed with no indications for additional monetary stimulus; the Bank of Japan introduced a yield curve control policy instead of specific amounts of asset purchases, expecting to guide 10-year government bond yields to 0% from below zero currently; the Fed kept rates unchanged but strongly signalled it could hike rates by the end of the year citing a recent pickup in economic growth and continued progress in the labour market as well as a less aggressive rise in interest rates next year and in 2018 than previously anticipated. The Bank of England also did not announce any further policies nor a change in rates, though they said a rate cut would likely be considered should the UK experienced a slowdown in economic activity. Prospects of central banks stimulus ultimately ending led to both a sell-off in government bonds and a credit spread widening in the US and Europe. Emerging markets were not immune but inflows continue to be positive, providing support to the asset class. Anxiousness in the finance sector was evident after Deutsche Bank received notification of a hefty fine from US authorities. OPEC announced that it planned to cut output for the first time since 2008 in a bid to prop up crude prices, but the plan came with no implementation date, duration, or details on how nations will split the output reduction.
NOVACAP Asset Management
Latest posts by NOVACAP Asset Management (see all)
- The “Unthinkable” has happened - 9th November 2016
- NHS Sicav – MC Bolero Global Allocation Fund– Fact sheet – October 2016 - 9th November 2016
- US presidential elections – Are markets bracing for a major shock in November? - 2nd November 2016