Eurizon SLJ Capital

Today, at the London Stock Exchange Market Open ceremony, we celebrated the #listing of our first #ActiveETF: the CO Eurizon SLJ EM Bond Strategic Income UCITS ETF. This actively managed fund, launched on the 2nd of July 2024, provides emerging market income while targeting developed market risk characteristics. The #ETF launched on the Connect ETFs platform, a new ETF platform connecting asset managers with leading ETF service providers. #emergingmarkets #wealthmanagement #bonds #assetmanagement

In this edition of The Long & Short, Neil Staines explores the growing debate over US growth exceptionalism, Europe’s fiscal expansion, China’s economic recovery, and the market’s sensitivity to shifting financial conditions. ◻️ Concerns over a US #growth slowdown are increasing, with fiscal policy shifts and cautious corporate guidance suggesting a potential moderation rather than continued exceptionalism. ◻️ Europe’s fiscal expansion, increased defense spending, and potential economic recovery in #China could shift global growth dynamics, challenging the dominance of US #equities. ◻️ The #US #economy is more sensitive to financial conditions than Fed policy, meaning declines in equity markets could dampen spending confidence, particularly among high earners. ◻️ While US #disinflation and growth moderation remain the base case, risks from tariffs, #global equity rotations, and #geopolitical shifts could introduce significant market uncertainty—keeping “the heat on.” #macroeconomics #wealthmanagement #fixedincome #investing

In this edition of The Long & Short, Neil Staines discusses UK economic shifts, global trade dynamics, a potential Russia-Ukraine ceasefire, and the Fed’s cautious policy stance: ◻️ UK #economic data continues to signal weakness, with the BoE projecting slower growth, higher #inflation, and negative real wage growth through 2025, despite some short-term resilience in #employment and wages. ◻️ Global #trade policy remains a major focus, with Trump’s ‘negotiated reciprocity’ tariff approach potentially leading to lower global #tariffs rather than an outright trade war, contrasting with market fears of rising inflation. ◻️ There is growing momentum towards a Russia-Ukraine ceasefire, which could support European markets through increased #energy supply, #infrastructure rebuilding, and defence spending. ◻️ The Fed remains cautious, with #FOMC minutes reinforcing a patient approach to rate cuts, while discussions around slowing Quantitative Tightening (QT) could provide additional support for #bonds. ◻️ With a quiet data calendar next week, markets will remain focused on central bank commentary and #geopolitical developments, testing the resilience of expectations for #disinflation and #growth moderation.

In this edition of The Long & Short, Neil Staines explores tariffs, trade and geopolitics: ◻️ The Bank of England’s downgraded economic projections signal weaker UK #growth, higher #inflation, and declining real wage growth, reinforcing the need for a cautious monetary approach. ◻️ #Fiscal policy under Trump 2.0 is expected to focus on fiscal consolidation and regulatory changes, with US monetary policy influenced by #tariffs, immigration, and fiscal strategy. ◻️ #US plans for “reciprocal tariffs” suggest a more conciliatory trade stance, reducing the #risk of a global trade war and easing market concerns about inflationary pressures. ◻️ Early-stage talks between Trump and Putin to end the Ukraine war could improve global risk sentiment, with potential #economic benefits from restored energy supply and reconstruction opportunities in Europe. ◻️ The eurozone stands to benefit from reduced tariff threats, cheaper energy, and rebuilding contracts in Ukraine, positioning Europe for a stronger growth outlook and a potential #EURUSD rebound. ◻️ Disinflation, growth moderation, and evolving fiscal policies remain key #macro themes, with #Europe emerging as a potential bright spot amid improving trade and #geopolitical dynamics.

In this edition of The Long & Short, Neil Staines explores how recent monetary policy developments and fiscal consolidation efforts in the US, UK, and Europe shape the evolving #macroeconomic landscape and future rate expectations. ◻️ Despite minor #hawkish signals, Powell reaffirmed the Fed’s asymmetric dovish stance. Meanwhile, the #ECB’s evolving stance on “restrictive” policy suggests that the market focus will shift to the definition of neutral rates. ◻️ The BoE’s rate cut was expected, but the split vote and weaker #economic forecasts reinforce the likelihood of further measured easing. ◻️ The Fed’s #policy path is increasingly tied to fiscal decisions, with #tariffs, immigration, #regulation, and fiscal consolidation shaping #inflation and growth risks. ◻️ Contrary to market consensus, the Administration’s #fiscal consolidation plans, including the “3-3-3” framework, indicate a #disinflationary bias rather than unchecked fiscal expansion. ◻️ While markets brace for #inflationary shocks from tariffs and #labour shortages, structural disinflationary forces and fiscal prudence could enable continued #monetaryeasing from both the #Fed and #BoE. #investing #wealthmanagement #interestrates #bonds #equities

In this edition of The Long & Short, Neil Staines examines how swift US policy shifts contrast with Europe’s slower regulatory pace, shaping economic competitiveness and market sentiment. ◻️ The #US is enacting policy changes rapidly, while #Europe remains stuck in slow-moving regulatory debates, which are impacting economic competitiveness and market sentiment. ◻️ While the new US administration has drawn attention, the Federal Reserve's latest meeting underscored a slowing pace of rate cuts, reinforcing a more cautious #monetarypolicy stance. ◻️ Despite minor hawkish changes in the #FOMC statement, Chair Powell emphasized a balanced stance, highlighting that policy rates remain restrictive and maintaining the implicit dovish bias. ◻️ The Fed's policy trajectory depends on four key variables tied to the new administration—tariffs, immigration, deregulation, and fiscal consolidation—all of which influence #inflation, the labour market, and the yield curve. ◻️ The #ECB cut rates as expected but hinted at a more optimistic growth outlook. Real wages are rising, credit affordability is improving, and the global trade recovery is supporting European exports. ◻️ While many factors shape the global #macro landscape, the most significant driver remains the economic and #fiscalpolicies of the new US administration, with the Fed - and possibly global markets - pausing until more clarity emerges. #macroeconomics #investing #bonds #equities

In this edition of "The Long & Short," Neil Staines explores how global markets are responding to shifting regulatory dynamics, evolving monetary policies, and the ongoing tug-of-war between growth and inflation risks: ◻️ The #UK faces weakening #macroeconomic conditions, with potential for faster-than-expected interest rate cuts due to effective fiscal tightening and its impact on demand and employment. ◻️ The US is taking swift #economic action under Trump, contrasting with Europe’s slower, theoretical approach to resolving economic challenges. ◻️ #Tariffs under Trump are seen as a strategic negotiating tool rather than a long-term #policy, with potential collaborative outcomes overshadowed by tariff threats. ◻️ #Trump’s hiring freeze could negatively affect short-term labour markets, with the potential loss of approximately 40,000 monthly job #growth. ◻️ #US inflation forecasts suggest a benign trajectory in H1, with risks of restrictive rate settings if growth and #inflation fail to meet expectations. ◻️ #Europe must embrace #regulatory flexibility to unlock economic potential, while US risks remain balanced, with Trump prioritising action over debate. #investing #wealthmanagement #bonds #equities

In this edition of "The Long & Short," Neil Staines examines how global markets are bracing for shifts in monetary policy, fiscal dynamics, and the evolving trade landscape: ◻️ Markets are increasingly pricing in a 25 basis point rate hike by the Bank of Japan in January 2025, reflecting a shift in Japan's #monetarypolicy towards normalisation despite global divergences. ◻️ UK fiscal pressures and a weaker-than-expected economy could prompt the Bank of England to cut rates faster than markets currently anticipate, especially under a benign #inflation scenario. ◻️ The U.S. Presidential Inauguration and the World Economic Forum in #Davos will dominate global market sentiment, with significant attention on U.S. policy direction. ◻️ Front-loading in #globaltrade due to expected Trump tariffs adds complexity to #growth and inflation expectations, creating the potential for market volatility if policies disappoint. ◻️ Scott Bessent’s confirmation hearing highlighted a fiscally conservative bias with an emphasis on deficit reduction and tariffs as a multi-purpose tool for economic strategy. ◻️ The uncertainty around trade policies may have a greater negative impact on global markets than tariffs themselves, emphasizing the high anticipation of Trump 2.0’s economic direction. #macroeconomics #investing #bonds #equities #wealthmanagement

In the first edition of 2025 of "The Long & Short," Neil Staines explores the impact of bond vigilantes on global markets and monetary policy: ◻️ The Bank of Japan is gradually moving toward policy normalisation. The debate centres on whether the next 25bp rate hike will occur in January or March. ◻️ UK fiscal policy, perceived as a consumer-level tightening, has exacerbated market concerns, driving up #yields and highlighting potential dovish shifts in #monetarypolicy. ◻️ We continue to see gradual #disinflation and #growth moderation, though unsustainable U.S. #debt and fiscal policies could heighten market risks. ◻️ Market assumptions about the inflationary and contractionary effects of Trump’s fiscal and immigration policies may be overly simplistic, risking mispriced expectations. ◻️ The continuation of #disinflation and growth moderation aligns with Fed projections, though higher U.S. yields pose challenges for the dynamics of #government and #corporate debt. #macroeconomics #investing #wealthmanagement #bonds #equities

In the last edition of "The Long & Short" in 2024, Neil Staines explores the intricate dance of global #monetary policy, #fiscal dynamics, and their implications for markets in 2025. ◻️ The ECB’s recent 25 basis point rate cut and modest forecast adjustments underscore its cautious approach amid risks from potential U.S. #tariffs. #Markets may have overestimated the likelihood of a more aggressive policy shift. ◻️ The #BoJ maintained its rates at 0.25%, signalling continued caution in normalising policy despite rising inflation risks. Wage-price dynamics will be crucial ahead of the January meeting. ◻️ The #BoE held rates at 4.75%, with a surprising dissent for rate cuts, despite slower progress on disinflation (notably in wages). We maintain our weaker #growth forecast relative to consensus. Fiscal-monetary dynamics will shape 2025 policy expectations. ◻️ The Fed’s 25 basis point rate cut was set against a more “hawkish” narrative, slowing the pace of 2025 cuts. Fiscal expansion underpins growth and inflation dynamics, with uncertainties linked to the Trump administration’s fiscal policies going forward. ◻️ Despite lingering shocks in #housing and #insurance, the #Fed is optimistic about returning to target inflation, though higher 2024 inflation and Trump-era #fiscal impacts add uncertainty. ◻️ The U.S. fiscal backdrop, characterised by large deficits, has driven #economic outperformance and inflation. Expectations hinge on whether a #Trump administration would pivot toward fiscal conservatism. ◻️ The #macroeconomic trajectory will depend on fiscal policies, setting the stage for further monetary policy adjustments in #2025. #bonds #equities #FederalReserve #wealthmanagement #investing