There seems to be a consensus in the market that the Fed will gradually start tapering in the next few months (our guesses at BSIC is in December). Therefore it is time to understand what could happen to markets and get prepared. What could happen on the equity market in Read more…
Panel 22|11|2013 US This week Bernanke surprised the markets outlining the chance of early tapering of QE (December meeting). For us this is quite surprising, as we still believe the US economy is not performing as well as it was believed this spring. Three main reasons have worsened our outlook Read more…
Two main issues dominated the week, the Yellen speech in front of the senate and the BoE inflation report. Ms. Yellen’s tone was strongly dovish and we understand why. The US economy is not ready for a December tapering. Inflation is declining from 2% in July to 1.2% now and Read more…
Since the crisis hit, interest rates have been kept artificially to the lowest level the world has ever seen. This launched what was called the ‘hunt for yield’. As many investors ran for high-yield junk bonds, risk-averse investors who were uncomfortable with that level of risk turned to quality stocks, Read more…
The main rationale for the trade is a possible positive surprise of the European economy by the end of the year. The periphery has performed well and the recent resolution of the Berlusconi’s issue has reduced the political risk of the area. Moreover, the economic performances outline the beginning of Read more…
When first appointed in 2006 by President Bush, Ben Bernanke probably didn’t expect his two terms as the Chairman of the Federal Reserve to be the most decisive ones of the past century. First denying an housing bubble, he had to face its real burst and the most threatening crisis Read more…
Last week we suggested shorting three Japanese financials in light of the 10-years JGB price fall, going at the same time long Olympus Corp. and the Nikkei index, in case no more easing was announced on Tuesday night. Kuroda kept monetary policy on hold and so we entered the trade Read more…
INTRODUCTION During last months in Japan, extreme monetary policies – also known as Abenomics – implemented by the duo Abe-Kuroda to fight deflation and give a kick to the stagnant economy, have caused a huge reaction all over the markets: the Yen has been slashed, Nikkei index has been skyrocketing Read more…