Equities investing: to hedge or not to hedge currency risk?

Posted on 24. Feb, 2015 by Jean Jacques Ohana in Weekly Focus | 0 comments

As the euro significantly depreciated vs. a basket of currencies (figure 1), performance of portfolios labeled in USD and EUR has been contrasting. For instance, as euro zone investors celebrate a year to date 10% performance of MSCI World in EUR, US investors have to content themselves with a 3.5% performance (figure 2) in dollar [...]

How to invest after the oil meltdown?

Posted on 13. Feb, 2015 by Jean Jacques Ohana in Weekly Focus | Comments Off

Oil tumbled more than 50% over the last six months. While some oil consumers could benefit from the price collapse, oil-producing companies and countries have been badly hit. The oil slump may trigger a cascade of defaults in US high yield debt and sovereign debts of emerging countries such as Russia, Venezuela and Brazil. This [...]

How to prepare for Grexit

Posted on 09. Feb, 2015 by Jean Jacques Ohana in Weekly Focus | Comments Off

Following last week decision from the ECB to suspend eligibility of Greek sovereign debt as collateral for its liquidity operations, Tsipras made a defiant speech vowing to reverse Greek bailout measures.

In the game of chicken opposing the euro zone and Greece, both players are now heading against each other at full space. No one will [...]

Equities performance and monetary illusion

Posted on 03. Feb, 2015 by Jean Jacques Ohana in Weekly Focus | Comments Off

Many investors have cheered the catch up of European equities as if it was a matter of fundamentals. For sure, the relative monetary biases (accommodative in Europe vs. restrictive in the US) stimulates liquidity in Europe to the detriment of US. As reflected in Riskelia’s Radar (figure 1), dynamics of equities are sharply improving in [...]

So many bubbles: beware the landing!

Posted on 28. Jan, 2015 by Jean Jacques Ohana in Weekly Focus | Comments Off

 
January 28, 2015

Riskelia’s bubble indicator characterizes bullish or bearish herding behavior on every asset quoted on a daily basis. It is exclusively based on market prices and scores the regularity of the price moves on various time frames.

A review of the most significant bubbles enables to us to identify the investment themes where the exaggeration [...]

The silly decision of the Swiss National Bank: a gift to the Eurozone

Posted on 19. Jan, 2015 by Jean Jacques Ohana in Weekly Focus | Comments Off

On Thursday morning 15th January 2015, a surplus country, Switzerland, has decided on its own to exit from the peg vs. the euro. In short it has existed voluntarily from the euro zone in a snap of fingers. Surplus countries (Germany, Netherlands, Finland, Austria…) which could consider exiting from the euro zone have learned how [...]

The incommensurable value of US bonds

Posted on 13. Jan, 2015 by Jean Jacques Ohana in Weekly Focus | Comments Off

In a context of generalized decrease of medium and long term yields (figures 1 and 2), US bonds currently present the most attractive 5-years yields among all bonds of developed countries. The spread between 5 years US and Germany’s yields (figure 3) provides a clear illustration of the attractiveness of these US bonds. Its level [...]

How to invest in 2015?

Posted on 07. Jan, 2015 by Jean Jacques Ohana in Weekly Focus | Comments Off

Each year, economists and money managers provide their economic and financial forecasts. In 2014, the consensus anticipated a rebound of European growth, a lift in global rates and an outperformance of euro zone equities. What has been the final outcome? Bonds market in Europe have experienced a rise of more than 15% as euro zone [...]

High bubbles on sovereign debt, swelling bubbles on deflation

Posted on 18. Dec, 2014 by Jean Jacques Ohana in Weekly Focus | Comments Off

Many bubbles are currently unfolding according to Riskelia’s Radar. The Bubble Indicator reflects bullish or bearish herding behavior. It is only based on market prices and scores the regularity of price moves on various time frames.

Figure 1 highlights that bubbles are actually focused on three investment themes:

Positive bubbles on sovereign debt, particularly in the Eurozone,

Negative [...]

Contagion spreading from commodities to emerging debt

Posted on 11. Dec, 2014 by Jean Jacques Ohana in Weekly Focus | Comments Off

Financial integration is on the rise again. From the lowest point of diversification achieved since 2004, financial markets have started to correlate to each other as illustrated by figure 1. It is particularly true in commodities markets where the crash of the oil market (-35% in just three months) spread to other cyclical commodities (iron [...]