Latest from Lyxor
20 Jan 2020: Fed doves get a boost while earnings impress
US earnings season kicked off last week on a positive note, with financials including J.P. Morgan, Citi, BofA and BlackRock all beating consensus expectations. In politics, US President Trump and China’s Vice Premier Liu signed a ‘Phase One’ trade deal between the two nations, widely interpreted as signalling the end of an 18-month trade war. Certain tech and cybersecurity issues will be considered in the Phase Two trade deal. Equity markets stayed in a sweet spot, supported by an improving global economic outlook. US inflation and wage growth fell short of expectations.
Next week will be shortened in the US with Martin Luther King Jr. Day celebration on Monday. Investors will focus on the corporate earnings season. The ECB will release its policy decisions on Thursday, and President Lagarde has already made clear that climate change will be a prominent feature. Business confidence surveys will also be released. In the UK, further deterioration in PMIs would increase the likelihood of a rate cut from the BoE at the turn of the month – just before the UK leaves the European Union on 31 January. In Asia, three central banks will hold their monetary policy meetings. The Bank of Japan is expected to keep policy rates on hold on Tuesday, but may also nudge up its growth outlook, considering the stronger fiscal policy support.
Latest performance
Source: Lyxor International Asset Management. Figures reported in local currency terms. Past performance is no guide to future returns. Data as at
Our key calls
Week commencing 15/01/2020
Riding the US earnings wave
US earnings season started well. More positive results could fuel the rally even further in the short term. Caveat: US equity valuations are back at demanding levels, which should ultimately limit their upside in 2020
ECB goes green
There is a growing global consensus on climate change, increasing demand for sustainable investments. The ECB has been purchasing green bonds under both the CSPP and public sector purchase programme. Green bonds are likely to continue growing, attracting new and diverse issuers and investors.
More upside for Japanese equities
Easy monetary policy and a rotation to value stocks have been supporting Japanese equities. The recent US-China trade deal should encourage an improvement in global trade, while stimulus in China should generate better conditions across the Asia-Pacific region. Japan is well-placed to benefit. It also provides diversification benefits for Europe or US heavy portfolios.
Things we are watching out for
The Main Event
Lyxor strategists on the key moments in the week ahead
Coming soon...
Other major events
4 more things to put in the diary
23
Jan
29
Jan
FOMC meeting (with forecasts)
30
Jan
BoE MPC meeting (with report
31
Jan
BoE Carney mandate ends
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These are the views, opinions and recommendations of Lyxor International Asset Management (“LIAM”) Cross Asset and ETF research analysts and/or strategists as at 15 January 2020. To the extent that this research contains trade ideas based on macro views of economic market conditions or relative value, it may differ from the fundamental Cross Asset and ETF Research opinions and recommendations contained in Cross Asset and ETF Research sector or company research reports and from the views and opinions of other departments of LIAM and its affiliates. Lyxor Cross Asset and ETF research analysts and/ or strategists routinely consult with LIAM sales and portfolio management personnel regarding market information including, but not limited to, pricing, spread levels and trading activity of ETFs tracking equity, fixed income and commodity indices. Trading desks may trade, or have traded, as principal on the basis of the research analyst(s) views and reports. Lyxor has mandatory research policies and procedures that are reasonably designed to ensure that purported facts in research reports are based on reliable information and (ii) to prevent improper selective or tiered dissemination of research reports. In addition, research analysts receive compensation based, in part, on the quality and accuracy of their analysis, client feedback, competitive factors and LIAM’s total revenues including revenues from management fees and investment advisory fees and distribution fees. Click here for more.
These are the views, opinions and recommendations of Lyxor International Asset Management (“LIAM”) Cross Asset and ETF research analysts and/or strategists. To the extent that this research contains trade ideas based on macro views of economic market conditions or relative value, it may differ from the fundamental Cross Asset and ETF Research opinions and recommendations contained in Cross Asset and ETF Research sector or company research reports and from the views and opinions of other departments of LIAM and its affiliates. Lyxor Cross Asset and ETF research analysts and/ or strategists routinely consult with LIAM sales and portfolio management personnel regarding market information including, but not limited to, pricing, spread levels and trading activity of ETFs tracking equity, fixed income and commodity indices. Trading desks may trade, or have traded, as principal on the basis of the research analyst(s) views and reports. Lyxor has mandatory research policies and procedures that are reasonably designed to ensure that purported facts in research reports are based on reliable information and (ii) to prevent improper selective or tiered dissemination of research reports. In addition, research analysts receive compensation based, in part, on the quality and accuracy of their analysis, client feedback, competitive factors and LIAM’s total revenues including revenues from management fees and investment advisory fees and distribution fees. Click here for more.
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