Sections

IPE Expectations Indicator July 2016

During the survey period, managers experienced a different environment than during the two prior months. The dollar reversed its weakening trend, and commodity prices diverged as oil prices rose, metals’ declined, and coming screaming to the forefront of geopolitical headlines was the Brexit vote.

Click here to download the complete pdf

expectations legen 411


Equities

 USEuro
-zone
JapanAsiaUK
% predicting rise (previous month)24 (24)63 (57)40 (35)41 (42)33 (25)
% predicting stability (previous month)55 (48)27 (34)44 (44)45 (45)54 (55)
% predicting fall (previous month)21 (28)10 (9)16 (21)14 (13)13 (20)

Previously expectations for all equity markets to increase were at two-year lows, and expectations for declines were elevated. A month later, the dour mood has slightly abated. While collective expectations for gains have increased, they remain low. As the concerns over Brexit magnified, the expectations for UK equity market gains increased more than any other markets.

equitie 660


Bonds

 $¥£
% predicting rise (previous month)7 (9)5 (7)6 (8)9 (12)
% predicting stability (previous month)45 (41)66 (60) 46 (44)55 (49)
% predicting fall (previous month)48 (50)29 (33) 48 (48)36 (39)

The collective expectation for bond prices to rise, across all denominations, was at its lowest in two years. Expectations for sterling bond prices to rise matched their lowest level in the two-year span with only 6% of respondents saying sterling bonds appear attractive. Only yen bonds had less supportive indications.x

bond price 658


Currencies

 $/€$/¥$/£
% predicting rise (previous month)43 (43)48 (48)27 (31)
% predicting stability (previous month)41 (44)38 (37)48 (50)
% predicting fall (previous month)16 (13)14 (15)25 (19)

Unsurprisingly, all eyes are focused on sterling. There was no change in the level of expectation for the dollar to strengthen against the euro for the fifth month, though there has been a bit of defection from those expecting stability, into the dollar/euro weakness camp. The biggest move in the survey period was an increase in those expecting the dollar to fall against sterling. The implication being, since September 2015, managers have increasingly believed the dollar will weaken versus sterling, reaching a level in the most recent survey that is far above any prior month in at least the last two years. If a Brexit ‘yes’ vote resulted in weakening the pound, then fewer managers than in any recent month expect this scenario to occur.

currencie 660

Related Files

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • DS-2382

    Closing date: 2017-12-14.

  • QN-2383

    Asset class: Residential Property.
    Asset region: Ireland.
    Size: EUR 10m.
    Closing date: 2017-12-18.

  • QN-2384

    Asset class: Equities Switzerland (Large Caps).
    Asset region: Switzerland.
    Size: CHF 550 – 600 mn.
    Closing date: 2017-12-15.

  • QN-2385

    Asset class: Liability Driven Investment.
    Asset region: Europe.
    Size: Size: EUR 1 Billion, Liability size: EUR 3 Billion.
    Closing date: 2018-01-08.

  • QN-2386

    Asset class: Fixed income.
    Asset region: Global developed markets.
    Size: CHF 500 -1000m.
    Closing date: 2018-01-15.

  • DS-2392

    Closing date: 2017-12-21.

  • QN-2393

    Asset class: All/Large Cap Equities.
    Asset region: Europe.
    Size: EUR 200m.
    Closing date: 2017-12-21.

  • QN-2394

    Asset class: Real Estate Industrial.
    Asset region: Europe.
    Size: EUR 10m.
    Closing date: 2018-01-04.

Begin Your Search Here