ECB marches towards normalisation
Following the European Central Bank’s (ECB) announcement today, Olivier Marciot, Investment Manager on Unigestion’s Multi Asset Navigator fund, said:
“Despite the ECB leaving interest rates unchanged, the rhetoric and details of today’s announcement clearly signal the end of monetary policy easing across Europe and paves the way for an era of global normalisation. After the initial reaction of the Euro strengthening and European yields surging due to the somewhat hawkish headline decision to keep rates as they are, the market is now digesting the more balanced tone of Draghi’s press conference.
“The age of accommodative monetary policies will soon be behind us and so too will be the ultra-low volatility world we have lived in over the last few years. The pace at which the major central banks normalise their policies will be key to asset returns this year and beyond. We believe now more than ever in the power of extended diversification and dynamic risk management. The first enables multi asset solutions to be less directional and reliant on market beta, while the second allows them to adapt and benefit from increased volatility while cushioning against adverse market conditions.”
To read our Cross Asset Solutions team’s full commentary, please click here.