Nordea AM: European Financial Stability - 'what’s cheap can get cheaper'
Nordea AM: European Financial Stability - 'what’s cheap can get cheaper'
In the case of Europe, Italy is one of the main risks affecting the continent’s financial stability, the IMF Financial Stability Report states. Witold Bahrke, Senior Macro Strategist at Nordea Asset Management, comments on Italy’s current situation:
In the case of Europe, Italy is one of the main risks affecting the continent’s financial stability, the IMF Financial Stability Report states. Witold Bahrke, Senior Macro Strategist at Nordea Asset Management, comments on Italy’s current situation:
”Italy showcases markets inability to price the global phenomenon of populism. Given this inability, rather than making big directional bets based on perceived ‘cheapness’ in areas that have been hit by the tremors of populistic agendas (Italy, Emerging Markets), we prefer to stay agile and limit the correlation to overall markets. Investing in liquid alternatives is our preferred way to obtain these objectives. What’s cheap can get cheaper: Italian spreads widen (see graphic).”