Posted On 27 Dec 2016
27/12/2016 In 2016 we got many things right. China didn’t collapse. Brazil rallied hugely. The US Dollar went up. Bonds sold off. Emerging Market currencies sold off, except for the Russian Ruble. We were on the wrong side of Brexit, but still managed to take advantage of a falling GBP. We hoped that Trump wouldn’t win the US elections as that would change many dynamics. But he did win and some changes will happen and on many others even his administration will be constrained. These are our thoughts on what 2017 may have in store for us: USD We are probably more than ¾ of the way in the US Dollar rally. Infrastructure spending under Trump will push up US rates and US Inflation more significantly compared with European Rates and European Inflation. But the weaker EUR, GBP, JPY and weaker EM currencies will feed inflation all over the world.
Posted On 30 Jun 2013
The Japanese stock market as measured by the N225 had an amazing run in the 1980’s when starting at at level around 10,000 in 1984 the index moved close to 39,000 at the beginning of 1990 and then has had a relentless slide culminating to level below 8,000 in February 2009, The stock market rally of the 1980 was accompanied by a depreciating Japanese Yen (JPY) and the fall in the market was unusually accompanied by a rising JPY such that by beginning of 2012 it had risen to below JPY 78 to 1 USD. Like the CHF, the JPY is considered to be a safe haven currency in times of economic crisis elsewhere. The crisis caused by the fall in the stock market was so severe that Japanese companies and investors were repatriating money back to Japan. Japan has been in a deflationary spiral for a long time. The