March Global Macro Monthly - The great rate debate
- Growth rebounds remain virus and vaccine dependent. The outlook is solid in US and good in the UK. Euro area prospects are hampered by vaccine management. Japan is also overseeing a slow inoculation programme. The pace is mixed across Emerging Markets.
- Fiscal stimulus is super-charging the US outlook but creating uncertainty over inflation. Headline inflation will rise globally across 2021, but a sustainable return to central bank inflation targets is unlikely next year outside the US or EM’s with loosely anchored expectations.
- Central banks reflect local conditions. The Fed has pushed back on premature tightening; the ECB promised additional PEPP purchases. But EMs with inflation pressure and volatile FX have started to raise rates.
- Bond yields have risen in the US and are having spillover effects elsewhere. Other asset classes are following reactions in real rates space.
This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.
It has been established on the basis of data, projections, forecasts, anticipations and hypothesis which are subjective. Its analysis and conclusions are the expression of an opinion, based on available data at a specific date.
All information in this document is established on data made public by official providers of economic and market statistics. AXA Investment Managers disclaims any and all liability relating to a decision based on or for reliance on this document. All exhibits included in this document, unless stated otherwise, are as of the publication date of this document.
Furthermore, due to the subjective nature of these opinions and analysis, these data, projections, forecasts, anticipations, hypothesis, etc. are not necessary used or followed by AXA IM’s portfolio management teams or its affiliates, who may act based on their own opinions. Any reproduction of this information, in whole or in part is, unless otherwise authorised by AXA IM, prohibited.