DIY Investor Magazine
/
2015 Issue
11
“Regional divergence has been a key theme in
2014 and we would expect central bank policy to
continue to reflect local economic conditions. The
US has withdrawn quantitative easing (QE), but
Japan is doing more QE and the European Central
Bank (ECB) is likely to follow suit in the first quarter
of next year.
Equally we would expect the recent strengthening
of the dollar to continue, especially if growth
elsewhere in the world remains relatively muted
and investors believe there could be interest rate
rises in the US.
This is likely to have an impact on emerging
markets, and could be positive for exporters in
Europe and Japan as their currencies weaken
relative to the dollar.
China may now have the largest economy in the
world but growth there is currently slowing and
its composition is changing as the country seeks
to rebalance towards domestic consumption and
away from a reliance on exports.
The sharp drop in oil price in 2014 will almost
certainly also have an impact in 2015. It is
already translating into a delayed action “tax
cut” for consumers across the world as drivers
are now discovering, but could cause some
oil producers around the globe to go out of
business if prices remain low for an extended
period.
If the US and UK economies continue to grow,
we would expect to see interest rates begin
to normalise in 2015 and beyond, though this
is likely to be a very gradual process. Given
the factors likely to affect markets, equities are
currently our asset class of choice for the patient
long-term investor.”
WHAT DOES SEEM CLEAR TO US,
HOWEVER, IS THAT IT SHOULD BE
SUPPORTIVE FOR EQUITY MARKETS
AND SHOULD WEAKEN THE EURO.
MULTI-ASSET – JOHN CHATFEILD-ROBERTS, CIO AND
HEAD OF THE JUPITER INDEPENDENT FUNDS TEAM
