There is value left in eurozone investment-grade corporate bonds even after a solid 2023. Scope for looser monetary policy from the European Central Bank will likely be one of the key drivers, potentially paving the way to returns of 6-6.5% in 2024, argues Victoria Whitehead, Head of Investment-Grade Credit, on this Talking Heads podcast with Daniel Morris, Chief Market Strategist.   Continued inflows reflecting a search for yield among investors aligned with the prospect of companies issuing fewer bonds due to fewer merger and acquisition deals bode well for the segment in 2024. Many blu ..read more

The US Federal Reserve this week surprised markets by revising down its forecasts for inflation and policy rates in 2024 alongside. This pivot caught bond markets off guard and boosted the rally underway since late October. In Europe, the European Central Bank and the Bank of England did not join the party. They remained cautious, providing an eloquent illustration of the differing approaches to monetary policy on each side of the Atlantic.   Ahead of the final meeting of 2023 of the Federal Open Market Committee (FOMC) on 12-13 December, there was no doubt in the markets that policymaker ..read more

COP28 saw a unique accord on the start of efforts to reduce global consumption of fossil fuels. The deal signalling the end of the fossil fuel age was striking given that the UN climate conference was being held in an oil-exporting country. It came after the conference president had suggested there was ‘no science’ that a phase-out of fossil fuels would help contain global warming to 1.5C.   Other headline-grabbing developments included an agreement to put the so-called loss and damage support fund into operation, as well as a greater focus on renewable energy sources, accelerated decarbo ..read more

To ensure a sustainable future, a low-carbon, environmentally friendly and more inclusive economy is key. We believe this involves us, as an asset manager, in making a substantive contribution to the energy transition. We intend to achieve this by implementing the sustainability-oriented approach that is core to our business strategy and investment decisions.   This video discusses our net zero commitments and methodology including how we align investments with efforts to cut the carbon footprint of portfolios, how we act as good stewards and engage with stakeholders, and the measures we ..read more

Amid growing hopes  that the US economy will land softly in 2024, financial markets are pricing looser monetary sooner than expected. John Bradley, Head of Foreign Exchange, and Daniel Morris, Chief Market Strategist, discuss the prospects for the main developed market currencies in this environment.   On this Talking Heads podcast, John highlights the likelihood of the US dollar weakening, especially  against the Japanese yen, as markets anticipate changes in interest rate differentials. He notes that there could be a race between the US Federal Reserve and the ECB as inflation ..read more

Government bonds could have paused for breath after their sharp November rally on market expectations of rate cuts early in 2024. But they didn’t. At the beginning of December, central banker comments contributed to a further fall in yields throughout the curve. The next US Federal Reserve (Fed) and European Central Bank (ECB) monetary policy decisions are due on 13 and 14 December, respectively. This week, just before the traditional black-out period for their committee members ahead of these meetings, comments from two senior figures caught investors’ attention. Were Jerome Powell’s remarks ..read more

In this Thematic Investing video, our experts discuss the ins and outs of impact investing, how it relates to sustainable thematic strategies and how to allocate to themes such as the energy transition and climate change.   Jane Ambachtsheer, Global Head of Sustainability, highlights the growing interest in investments that intend to have an additional and measurable social and/or environmental impact alongside an attractive return. She also discusses what sets apart impact investing and sustainable thematic strategies that are focused on areas such as water and food. Mark Richards, Head ..read more

Bond markets rallied sharply in November on the back of falling inflation and weak economic data, markedly benefiting our active asset allocation portfolios, where being long duration is our largest risk position. We still see the risks to consensus economic growth forecasts for 2024 as being to the downside, notably in the US and Europe. Asset valuations still point to the attractiveness of fixed income over other assets. Equity valuations look rich to us, particularly when a more cautious earnings outlook is factored in. in this context, we remain cautious on equities, chiefly in Europe, wit ..read more

In this episode of our Talking Heads podcast, Andrew Craig, Co-head of the Investment Insight Centre, and Daniel Morris, Chief Market Strategist, discuss our 2024 Investment Outlook “Stepping into a new reality.” The discussion focuses particularly on the questions raised during recent meetings and events to discuss our outlook for 2024.    The outlook covers the shift in the macroeconomic setting that investors can look forward to and what this means for asset allocation. Separately, they discuss the 2023 rally of the ‘Magnificent-7’ (large-cap US equity tech stocks) and the importa ..read more

The pace of inflation in developed markets has slowed, while China’s economic weakness appears to have hit a ‘pain point’ that has finally got  Beijing’s attention. The big question for financial markets is whether we are finally seeing the first signs of a shift in monetary policy towards easing. Developed market central banks are still wary of cutting rates too soon, but China’s central bank has recently moved more assertively.   Despite a fall in inflation… The markets’ key focus is still very much on inflation. Last week’s consumer price reports in Europe, the UK and the US did n ..read more