Lazard Asset Management’s Post

Market returns were mixed over last week as investors readjusted expectations for interest rate cuts as new economic data was released. Central bankers in the US and Europe attempted to calm investors who may have been overoptimistic on the quickness of rate cuts, telling the market that central banks need more data about economic conditions before any informed decisions on future paths can be taken. https://lnkd.in/e5-Uv5Rk

Muzinich & Co Weekly Market Comment While volatility remains suppressed, this is no time for investors to be complacent. In our latest round up of developments in financial markets and economies, we consider the risk of a mistake by central banks due to an inflationary issue they may be exacerbating by their own restrictive policies. Please click here to read the full article - https://lnkd.in/ej7ZFfRT

GLOBAL. Monetary Policy. What kind of monetary policy normalization is about to be delivered globally? In the absence of new significant supply or demand-side shocks, this outcome may ultimately depend on the estimated trajectory of policy rates congruent with inflation convergence within the horizon of monetary policy effectiveness. However, what happens if, as a central bank, you are more uncertain than usual regarding your own projections?

It’s late, it is very late, but it’s not too late! With inflation within the mandate zone, the balance of risk is now shifting to growth. Central banks have started their journey of policy rate normalization. So the time has come to lock in yields in longer duration fixed income. It is certainly already late, and indeed very late but clearly not too late to step in on fixed income. It was a great pleasure to discuss fixed income outlook and many more eye catching opportunities, not least in Private assets at this great venue organized by Markets Group.

Markets are set to be busy this week with a European Central Bank policy meeting, testimony by Federal Reserve Chairman Jerome Powell, and the U.S. jobs report on Friday. Here’s what you need to know to start your week. SOURCE: Investing.com #datadriveninsights #AssetlinkAI #marketintelligence

Winston Churchill used to say: “I no longer listen to what people say, I just watch what they do. Behavior never lies”. The narrative today-what they say- tells us the economies are strong and the soft landing is not only possible, it’s the scenario with the highest probability of occurrence. In the chart below, however, you can se what they’ve done (behavior): for the month of September that has just concluded, central banks around the world have executed 21 rate cuts, which have only been higher over the last 25 years during the great financial crisis and during Covid-19. The difference this time, is that we’re not in a crisis, at least not officially. But the monetary actions that have been executed in terms of size, speed and direction correspond to a behavior that will be associated with a crisis. And it looks like the trend is going to continue. Are central banks preparing us for something we’re not aware of? Why has the airbag popped if there hasn’t been a crash? Want to know more? join Fund@mental here https://lnkd.in/en3eA832 #iamfundamental #soyfundamental #wealthmanagement #familyoffice #financialadvisor #financialplanning #policymistake #ratecut #stagflation

2024 has started with markets struggling to maintain the momentum from the end of 2023. So why the hangover? Two factors - central banks pushing back on expectations of rate cuts as soon as March and secondly solid economic data in the US lowering the need for the Federal Reserve to ease policy. Read more on what's going on in markets via the link: https://bit.ly/3vJjsK3

While the market's pricing major central banks to start cutting interest rates in 2024, it is expected to see a 𝗵𝗶𝗴𝗵𝗲𝗿-𝗳𝗼𝗿-𝗹𝗼𝗻𝗴𝗲𝗿 𝗶𝗻𝘁𝗲𝗿𝗲𝘀𝘁 𝗿𝗮𝘁𝗲 𝗲𝗻𝘃𝗶𝗿𝗼𝗻𝗺𝗲𝗻𝘁 📈 after decades of low borrowing costs.   🛑 𝗥𝗶𝘀𝗸𝘀: Escalation of geopolitical tensions, extreme weather conditions and structural changes in the global economy could force central banks to keep rates high.   ✅ 𝗢𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝗶𝗲𝘀: cash-rich companies and consumers will benefit from the high interest rate environment capitalizing on higher savings return and/or seizing market opportunities.   👉 Anyway, 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀𝗲𝘀 𝘄𝗶𝗹𝗹 𝗻𝗲𝗲𝗱 𝘁𝗼 𝗿𝗲𝗮𝘀𝘀𝗲𝘀𝘀 𝘁𝗵𝗲𝗶𝗿 𝘀𝗵𝗼𝗿𝘁 𝗮𝗻𝗱 𝗹𝗼𝗻𝗴-𝘁𝗲𝗿𝗺 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗽𝗹𝗮𝗻𝗻𝗶𝗻𝗴 to effectively navigate higher borrowing costs negatively impacting their margins.   Source: Euromonitor International. 𝐸𝑛𝑗𝑜𝑦𝑒𝑑 𝑡ℎ𝑖𝑠 𝑝𝑜𝑠𝑡? 👍𝐿𝑖𝑘𝑒 💬𝐶𝑜𝑚𝑚𝑒𝑛𝑡 🔁𝑅𝑒𝑝𝑜𝑠𝑡 🔔𝐹𝑜𝑙𝑙𝑜𝑤 𝑚𝑦 𝑝𝑟𝑜𝑓𝑖𝑙𝑒 #interestrate #forecast #centralbanks #risks #opportunities #macroeconomy

The recent large moves across markets are likely to continue as investors assess incoming data for guidance on the likely response by central banks, led by the U.S. Fed. Explore the investment implications and pockets of opportunities for investors to diversify their portfolios amid the expected policy easing. Check out our latest #OnTheMindsOfInvestors Learn more Hong Kong: http://spr.ly/6043lI4dJ Singapore: http://spr.ly/6044lI4dK Australia: http://spr.ly/6045lI4dz #MarketInsights

The era of low yields that existed since the global financial crisis has come to an end. We believe central banks will be operating in higher policy ranges in the years ahead and this should keep bond yields elevated. Read why we believe it’s time to look at increasing your allocation to fixed income in our latest paper: https://bit.ly/3VbenEA Capital at risk. For professional investors only.