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Hasenstab on global growth: headwinds or tailwinds?

04 March 2015

While some forecasters predict gloomy global growth this year, the contrarian-minded Dr. Michael Hasenstab, chief investment officer, Templeton Global Macro (formerly known as Templeton Global Bond Group), has a different view. He aims to counter what he sees as “excessive pessimism” surrounding the global economy and outlines why he believes the recent plunge in oil prices could prove a tailwind, not only for economic growth in the United States, but also in Europe. He also offers his scorecard regarding Japan’s monetary policy experiment dubbed “Abenomics.”

The long wait is over

04 March 2015

For British investors, the 16-year drought is over. The FTSE 100 Index finally closed above its previous record of 6 950 index points, set in 1999, last week. Optimism that the Greece crisis has been resolved for now, and a better performance from resource heavyweights helped propel the FTSE last week. This provides an opportunity to remind ourselves of a number of important investment principles:

Monetary policy matters

02 March 2015

This year we expect the divergence in monetary policy among the world’s central banks to be a key theme and a likely driver of asset flows. For now, the scorecard seems to be tilted toward monetary easing since in the first month of 2015 alone, 14 central banks engaged in some form of monetary policy loosening, generally in the form of interest rate cuts or asset purchases.1 Denmark’s central bank has been particularly aggressive in regard to the former, slashing interest rates four times in a three-week period already this year, while the European Central Bank (ECB) announced plans to step up its quantitative easing (QE) game plan, taking a page from the playbook of the US Federal Reserve (Fed) and Bank of Japan.

An unsteady first step

25 February 2015

The new Greek government and the Troika have successfully cleared the first and easiest hurdle to Greece remaining within the Eurozone. There are unfortunately several more difficult obstacles yet to overcome. While we believe both sides wish to avoid “Grexit”, the chance of a policy mistake remains: we put the probability of an exit from EMU within the next two years at around 25%. Despite these risks, however, the benefits to the Eurozone flowing from the very significant easing in financial conditions that the QE announced in January has unleashed should not be underestimated. On a currency hedged basis the Eurozone still provides some very attractive opportunities for investors.

quick poll

Question

Do you think short-term insurance broking will survive the AI plus humanoid robotics age?

Answer

Human first always Not a chance Possibly maybe Yes, but reimagined

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