Do not forget to hold Japanese stocks!

Posted on 24. Jun, 2014 by Jean Jacques Ohana in Weekly Focus

As showed in figure 1, Japanese equities are coming back to the forefront with a remarkable positive dynamic. Since the beginning of 2014, the USD/JPY used to offer better perspectives than Japanese equities. This trend has however reversed since May 2014 so that Japanese equities now present better risk/reward than the short position on the [...]

Why UK 10 years yields may stay low in the face of the BOE rate increase

Posted on 17. Jun, 2014 by Jean Jacques Ohana in Weekly Focus

When Bank of England Governor Mike Carney hinted that the first interest rates rise could come sooner than expected, UK 2 years rates rose 15 bps whereas UK 10 years rates barely moved.

The flattening of the yield curve (showed in figure 1) characterizes a cycle of monetary tightening. When Central Banks tighten monetary policy, short [...]

Easing of financial conditions on emerging assets

Posted on 10. Jun, 2014 by Jean Jacques Ohana in Weekly Focus

We mentioned in April 2014 the strengthening of our indicators on emerging assets. The recovery was first spotted in Asia where Indian and Taiwanese stocks showed impressive positive dynamics at the beginning the year.

As showed in figure 1, emerging bonds in dollar are clearly leading the way up and MSCI emerging equities are following. Emerging [...]

Increase in equities + decrease in yields: what is behind this joint dynamics?

Posted on 03. Jun, 2014 by Jean Jacques Ohana in Weekly Focus

Since the start of the year, interest rates drifted lower including in core sovereign debts (US, UK, Japan, Germany) while global equities rose. As a matter of fact, the US 10 years rates dropped around 50 bps, the German 10 years Bund rate tumbled 60 bps whereas the MSCI World index increased by 3.3% before [...]