BlueBay AM: 'The latest fall in oil prices and UK political turmoil'
BlueBay AM: 'The latest fall in oil prices and UK political turmoil'
Mark Dowding, co-Head of Developed Markets at BlueBay AM, has issued his latest market insight in which he discusses concerns regarding slowing global growth, as well as the wave of government resignations which overshadowed a Brexit deal. Key points include:
Mark Dowding, co-Head of Developed Markets at BlueBay AM, has issued his latest market insight in which he discusses concerns regarding slowing global growth, as well as the wave of government resignations which overshadowed a Brexit deal. Key points include:
Oil slump: BlueBay are not expecting oil prices to fall substantially further and feel that prices should remain in a USD$55-$65 range in the months ahead.
Fed: With fiscal policy set to continue to power growth in the US in the next three quarters, BlueBay still believe that the Fed will remain on its path of rate hikes through 2019 and into 2020, and thus retain a short rates positions which is expressed via Eurodollar futures.
Brexit: Although the longer-term trade could be to look for higher Gilt yields in the medium term, it is the FX that may see the bulk of the move in the next few days and BlueBay see an opportunity for the pound to test its post Brexit lows against both the Euro and the dollar should events unfold as BlueBay currently expect.
Corporate credit: Spreads in the periphery and emerging markets have moved wider following moves in other risk assets in the past several days, with declining oil prices weighing on commodity exporters.