Valuations of some technology stocks have sky-rocketed in recent, sparking comparisons with the tech bubble at the turn of the millennium. Is this time different?
European investors have been responding to this year’s dollar weakness by hedging their investments in US equities, according to Morningstar data.
The euro has reached multi-year highs against all other major currencies this week after ECB-president Mario Draghi gave a blank speech at the Fed’s Jackson Hole meeting.
Sterling has fallen to its lowest point against the euro since December 2009 following the Bank of England’s (BoE) decision last week to keep rates unchanged.
Support for the euro has climbed to its highest level since 2004, with 73% of the population of the eurozone now supporting the common currency.
Net inflows into Japanese equity funds by European investors have picked up recently, as the current macro environment looks conducive to Japanese equities. Asset managers are also becoming increasingly bullish on the asset class.
Emerging market bonds have been on a strong run this year, and Europe’s investors think the rally isn’t over yet.
The bulk of US Treasuries are owned by the Fed and foreign investors. But this is set to change, and it could have serious consequences.
It has now been a year since the UK electorate made, as a British fund manager put it recently, “a huge strategic error of the like the country hasn’t experienced in maybe a century” by voting for Brexit.
This year’s dollar weakness took most investors by surprise. There are, however, obvious reasons for this, and fundamentals suggest it could reverse.