AXA IM: Fed and other central banks to restore market calm
AXA IM: Fed and other central banks to restore market calm
![Federal Reserve.jpg Federal Reserve.jpg](/l/en/library/download/urn:uuid:17725f84-771d-4d90-ad4d-4d60ed0e4937/federal+reserve.jpg)
'Market price action reflects several factors addressed below. The danger in the short term is that negative price momentum dominates any fundamentals, leading to outsized moves in equity and credit markets that, in turn, will threaten a change in the economic outlook. Under such a scenario some response from central banks cannot be ruled out' writes Chris Iggo, Chair of the AXA IM Investment Institute and CIO of AXA IM Core.
|
What would help from here? |
|
'Typically, we would look to central banks to restore market calm. It is not unusual for August to see this type of volatility. The underlying fundamentals for the global economy are fine, as recently expressed by the IMF. Even the weakening of the US labour market must be put in context – job openings rose recently, payroll growth is still positive, the unemployment increase may reflect temporary jobs. However, short-term, uncertainties will drive risk-off positioning which should be to the benefit of government bonds, high quality credit and currencies like the Swiss franc and the yen' Chris Iggo adds. |