In view of the conflict in Ukraine we have reduced our estimate for global economic growth this year to 3.5%.
The tragic situation in Ukraine is weighing on markets and on the mood of investors. It is impossible to forecast with any confidence how the conflict might develop.
Assuredly, one consequence will be an additional surge in inflation, which will hit Europe in particular. Consumption and living standards will suffer.
Quarterly/annual corporate statements continue to be mostly encouraging. But inflation concerns are increasingly being highlighted.
The U.S. yield curve is now very flat, even inverted in some sections. Credit spreads on corporate bonds have widened significantly since the beginning of the year.
The stock markets are unsettled by interest rate fears and the war in Ukraine.
The US dollar and the Swiss franc act as "safe havens".
Commodity prices increased, in some cases significantly.

The Fed's announcements led to a partial inversion of the U.S. yield curve. In the new issue of Aquila Focus, Nicolas Peter, Head of Investments Aquila, interprets the reaction of the financial markets and explains the FED's announcement that it will continue to raise the key interest rate by a quarter of a percentage point at the next six meetings.

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#FED #Financial Markets #EAM #AquilaFocus #Aquila

The majority of independent asset managers in Switzerland regard the current bear market as a buying opportunity, as a recent survey by the Aquila Group shows. The experts see the greatest upside potential in gold - due to the geopolitical situation.

The U.S. Federal Reserve raised the key interest rate by 25 basis points on Wednesday and held out the prospect of six more interest rate steps this year.

The eagerly awaited meeting of the European Central Bank (ECB) has taken place. The key interest rates remained unchanged. The bond-buying program is to be reduced more quickly than previously expected by the third quarter. The ECB is distancing itself from lower interest rates in the future. However, an interest rate increase is not envisaged for the time being.

In 2022, economic growth is expected to slow slightly to around 3.9%.
The inflation problem will remain an issue in 2022. The high money growth rates of the last two years mean that the inflation potential is high, even if the central banks were to "tap" faster.
To break inflation expectations, the FED has announced it will "tapering" twice as fast, with the prospect of three rate hikes.
However, the FED will only be able to normalize its monetary policy tentatively. The financial markets will play a key role in determining the pace.
The USD yield curve implies a "policy error" by the FED. Investors assume that growth will come under pressure after a series of interest rate hikes and that policy will be reversed again in two to three years.
The stock markets are trending friendly, albeit with decreasing market breadth.
The gold price consolidates around the level of 1,800 US dollars.

Russia’s warlike offensive has met with surprisingly fierce resistance within the Ukraine. The Ukrainian side is also receiving weapons from the West. The situation is in flux.

Russia has begun its invasion of Ukraine. Explosions are reported from various cities. Stock markets are correcting worldwide and safe havens are being sought by investors.

ECB President, Christine Lagarde has changed the tone of her commentary and now holds out the prospect of a reduction in monetary stimulus, albeit on a far more timid scale than that being planned by the Fed. Only after the US mid-term elections is a Fed policy shift, back in the direction of easing, likely.

Financial markets are once again showing their volatile side. Find out more about the FED announcement, record high inflation in the US and how Aquila is positioning itself accordingly in the first Aquila Focus of the year from Nicolas Peter, Head of Investments Aquila.

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Focus Points:

0:00 Intro
0:15 Volatility in the financial markets
1:27 Positioning of Aquila AG

#Volatility #Financial markets #Inflation #USA #FED #Aquila

Fed commentary on plans for a possibly rapid tightening of monetary policy is likely to be followed by some rather half-hearted action. Indeed, we see the markets forcing the Fed to back off from any aggressive tightening of policy. Financial markets are likely to remain volatile until the US midterm elections in November.

Independent asset managers in Switzerland had a good run last year. They must now be all the more vigilant in order not to squander the progress made in 2021 in the coming months. There are certainly enough risks.