Introducing a new monthly report co-authored by ETF Securities Research and Roubini Global Economics The World of Negative Rates
The World of Negative Rates
This report provides an update to themes introduced in our Quarterly Outlook, published on 21 January 2015. Our focus this month is on the uncharted waters of negative interest rates and what that implies for our key theme of monetary policy divergence and opportunities across asset markets.
Differing recoveries from the global financial crisis and the oil price slump have resulted in extremely low inflation in certain economies. In some cases (such as Europe), low oil prices have only reinforced deflationary trends.
This has opened up both the room and necessity for unusually low and even negative policy rates, particularly in Europe, even as other central banks, most notably as the Fed, prepare to hike. Safe-haven demand has plunged even longer-duration assets into negative territory.
What to watch this month: European Central Bank governing council meeting (Mar 5); Bank of England inflation and wages data (Mar 5); Chinese Jan and Feb macro data (Mar) for clarity on China’s growth and policy path; FOMC policy.
This communication has been provided by ETF Securities (UK) Limited (”ETFS UK”). ETFS UK is authorised and regulated by the United Kingdom Financial Conduct Authority (the ”FCA”).