All Inflation articles
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White papersBOE shies away from insurance cut and prays for sustainable growth
The Bank of England (BoE) held rates steady at its first meeting of 2020. With weak domestic growth and inflation, the BoE decided against an ‘insurance’ cut, which would have aligned it with other major central banks. However, the dovish tone on the economy means a move away from an easing bias is unlikely anytime soon, as highlighted by the BoE dropping the guidance for “limited and gradual tightening”. This should support asset valuations.
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Focal Point US outlook: a soft landing supported by the Fed
We expect the US economy to cool this year. Growth will likely ease from 2.2% to 1.6% because of the full effect of tariffs becoming effective during the first half of the year. The lagged impact of the 2019 rate cuts and that of the additional reduction we expect for Q2 will engineer a soft landing of the economy, despite still substantial headwinds. The Fed will take big steps to adapt its monetary policy strategy to a low-inflation, low-interest rates world. The broad view of this strategy should be clearer by summer, but the dovish bias it will most likely produce will be welcomed by markets.
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White papers
Investment Outlook Q1 2020: Slowing but going
On balance, we take a moderately risk-on approach, but a wide range of economic, domestic and geopolitical risks persist. Resumption of nuclear testing by North Korea and US conflict with Iran are on the radar. There’s also the US presidential election to contend with and various flavours of increasingly extreme politics vying to outdo each other. However, late cycle dynamics appear poised to extend for at least one more year.
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On My Mind: Will The US Economy Survive The Politics In 2020?
What might investors worry about? Dr. Sonal Desai, our Fixed Income CIO, covers her expectations for 2020.
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Blog: China themes for 2020 – growth and policy (2/2)
What to expect economically from superpower China in 2020? In the final part of this two-part series, senior economist Chi Lo discusses the outlook for inflation, growth and central bank policy.
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Our convictions for emerging markets in 2020
GDP growth should be stronger across many emerging markets in 2020 as Anjeza Kadilli explains.
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Core Matters: Where has inflation gone?
Over the past decades global inflation has been trending down. It averaged 8% yoy in the 1980s but stands at just 2.7% yoy in the current decade. Inflation is much lower in developed economies. Since 2011 it has hovered around 1.8% and 1.3% yoy in the US and euro area respectively, but only at about 0.3% yoy in Japan (excluding the sales tax hike in 2014).
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December Macro Dashboard
The announced Phase One trade deal between the U.S. and China, as well as the Conservatives increasing their majority in the U.K. election, has tempered two of the biggest political risks hanging over the global economy. At least temporarily, sentiment is turning optimistic.
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A guide to long lease real estate: Long-dated secure income for institutional investors
M&G has been generating attractive, long-dated income from long-term leases for our external clients for over a decade. In this guide, we explore the features and characteristics of the different types of long lease real estate, compare their outcomes for an institutional investor and look at the trends shaping the development of these assets.
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2020 appears tilted to the downside
The themes we discuss at our Annual Investment Symposium guide our research process. Over a longer-term horizon, we believe global stocks have greater performance potential than global bonds, supported by continued growth and moderate inflation. With government bond term-premia remaining below historical averages, we see a lower performance potential from government bonds.
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Mitigating Inflation Risk at Lower Opportunity Cost
Inflation-mitigating allocations can drag on returns when inflation is subdued: diversifying and tactical allocation can help.
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Continued Support For Asset Returns
Our capital market expectations (CME) are designed to provide annualized return expectation over a longer-term horizon, typically viewed as being five to 10 years.
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Screen The Euro Fixed Income Market In The Era Of Three ‘Lows’
As 2020 approaches, the uncertainty in the market has receded but there are still risks ahead involving macroeconomic, political and technical factors. Under such a scenario and with central banks being accommodative, we do not envisage a major increase in European core bond yields from their current levels given the limited growth potential and the scarcity of tools left in the ECB’s toolkit to stimulate the economy. Should the economic situation deteriorate, there could be room for yields to fall, but probably not to the lows reached in late August/early September.
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White papers
Growth Near an Inflation Point, Trade Remains a Wild Card
Leading indicators appear to be bottoming out and pointing to economic healing but geopolitical tensions revolving around trade and international security continue to cloud the outlook.
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Ten Crises We Avoided This Year
It turns out that we are not entirely hostage to immutable economic cycles or raging political intrigue. Sometimes people make good decisions in spite of our expectations. Sometimes, to be honest, we are just plain lucky and the dice land well.
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Comeback Time for International Equities?
Because the U.S. equity market is broad and deep, there will almost always be opportunities—but in aggregate, we think international equity markets may be more compelling over the next year.
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Coping With A Changing Market Landscape
Our CIOs’ Global Investment Outlook stresses it’s important to be selective and not too complacent in 2020.
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China needs a trade deal more than the US
The market perception is that the US is desperate for a trade deal with China. With the US in a manufacturing recession, and an election year ahead, the general view is that China can draw this out longer than the US. But the data may suggest otherwise. Given the mixed economic indicators, it is China - and not the US - that could do with the fiscal and sentiment boost that a trade deal would deliver in the short term.
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November Macro Dashboard
Global leading indicators edged higher in October; but remain in contraction territory. And while global central banks continue to maintain an accommodative monetary policy stance as downside risks to growth persist.
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Global Thought Leadership The 21st Century Portfolio
We have lived charmed lives: income, inflation, interest rates and investment returns were boosted by a heady mix of demographics, debt and disregard for the environment. In short, we have been living beyond our means. We believe the future will be different and expect the interaction of four themes to dominate portfolios during the lives of our grandchildren: low interest rates, demographics, climate change and innovation.
