Eight geopolitical dangers looming in 2016
15 Dec 15
Geopolitical risks are inherently difficult to predict, but here are some of the key issues GAM investment experts are watching in 2016.
ECB and the Fed: Time to move?
“Politicians are generally held in very low regard globally, evidenced by mid-term polls, demonstrations, devolution talk and blossoming fringe parties. The ironic risk is therefore that they will become more impressive and take the weight off central bankers, who occupy the first (Janet Yellen) and second (Mario Draghi) principal focus points. Both the ECB and the Fed risk having to reverse their anticipated December moves rather soon. Over the last four decades, ISM manufacturing data has been a great bellwether in predicting recessions when the reading is below 50, which it now is. US business confidence is struggling in many regional surveys too. Is this the backdrop upon which to hike? Consequently, the risk of a reversal of the Fed’s policy within 12 months is 25%, in my view. European strong money supply growth should help bolster future European growth. Is this the backdrop upon which further stimulus is required? I would attach the same probability of a reversal to the ECB.” – Tim Haywood, investment director and head of fixed income strategies
Tags: GAM | Investment Strategy
