Insights

Investors strongly believe that central banks are almost finished with their tightening campaign amid a fall in global inflation, and that policy rates will be lowered as soon as the second half of 2023. Still, uncertainty around this Goldilocks scenario remains elevated.

Economists continue to cast a pall of gloom over economic forecasts, questioning future output and growth. In this Strategy Blog, we discuss the supposed gloomy outlook and put into perspective the new opportunities and incentives for useful economic activity.

Capital markets experienced a difficult February, as renewed interest rate risk from further monetary tightening moved into focus. Both global equites and government bonds fell last month.

A war in Europe, an energy crisis, shades of the 1970’s – inflation and industrial unrest – and sharply rising interest rates. Just to name a few themes that dominated the economic and investment world in 2022. But what about 2023?

2022 was a tumultuous year: war, an energy crisis, and rising interest rates to name just a few main factors leading to a gloomy market sentiment. As a new year begins, Victor Balfour reflects back on the mood of 2022.

Diciembre fue un mes difícil para los mercados de capitales, ya que el apetito por el riesgo disminuyó a pesar de que la inflación estadounidense fue mejor de lo esperado: la renta variable mundial cayó y la deuda pública mundial también retrocedió.

As a family-run business in its seventh generation, our focus is on the long term: to preserve and grow your wealth not only for this generation but for those to come. In this Quarterly Letter, we discuss the important issues surrounding legacies and succession.

Recent policy moves by the four western central banks took the total interest rate increase in the last year to nearly twelve percentage points. In this Strategy blog, we take a look at the current inflationary episode and the ensuing effects on the economic environment.

With geopolitical risk still present and impossible for markets to ignore (though tensions may not necessarily increase further), we are left facing the cyclical question of whether inflation can subside without an economic slump.

This year, industrial action has been on the rise as demands for higher pay to compensate for real wage growth and inflation levels reaching multi-decade highs, causing some to create parallels to the 1970s. In this Strategy Blog, we discuss why we think these parallels are exaggerated.

En octubre, las expectativas de una ralentización del ritmo de las subidas de los tipos de interés y una temporada de resultados mejor de lo esperado impulsaron el sentimiento: la renta variable mundial subió considerablemente, mientras que la deuda pública mundial se mantuvo sin cambios.

At present, inflation rates have characteristics of being transitionary yet permanent, putting us at a crossroads. Will the inflation surge peak soon or will it gradually subside? It’s a matter of staying the course to see what direction inflation rates go.

The fiscal fiasco of the former PM’s minibudget put the UK economy centre stage – adding to the fiscal, monetary and geopolitical headlines. Looking beyond these issues, this edition of Market Perspective examines threats to growth, inflation and broader systemic risks.

En octubre, las expectativas de una ralentización del ritmo de las subidas de los tipos de interés y una temporada de resultados mejor de lo esperado impulsaron el sentimiento: la renta variable mundial subió considerablemente, mientras que la deuda pública mundial se mantuvo sin cambios.

While private debt is an attractive investment strategy, we analyse the risks of private debt investments and show why the choice of manager is so important.

En septiembre, la preocupación por una recesión mundial y el endurecimiento monetario afectaron duramente a los mercados de capitales: tanto la renta variable como la deuda pública mundial bajaron mientras la Fed y el BCE continuaban su ciclo de endurecimiento.

Plain sailing. Batten down the hatches. Strong headwinds. When describing markets, it's common to call upon maritime metaphors to convey uncertainty. In the current economic landscape, we find ourselves reaching for them again.

At different paces, and with varying displays of conviction and credibility, western central banks are continuing to raise interest rates, closing the stable door ever more firmly as the inflation horse canters merrily on the horizon. As we write, the rates priced into the money markets suggest that US, eurozone and UK policy rates will peak at 4.6%, 2.9% and 4.9% respectively, and will do so during 2023. Swiss rates are expected to peak at 2.2%, during 2024.

International tensions and geopolitical risk – which have rarely given rise to major market inflections and have often been relegated to the background by investors – are now back in the spotlight.

The sticky nature of today’s inflation remains the key risk to the global growth outlook. In this Market Perspective, we explore the macro and market backdrop – including a deep dive into the global inflation trajectory – along with the upcoming political calendar.

It is the worst calendar year return (so far) for bonds, some value may finally be re-emerging in the high-quality government bonds that comprise the core of the global market. Is it time to retire the acronym TINA (‘There is No Alternative’)?

En un mes volátil, los mercados de capitales revirtieron sus ganancias iniciales en agosto: tanto la renta variable como la deuda pública mundial se vieron presionadas después de que la Reserva Federal señalara que los tipos de interés estadounidenses seguirán subiendo y lo harán durante más tiempo.

The US headline inflation rate softened in July, though there is still uncertainty over its trajectory going forward. In this Strategy Blog, we highlight a few important observations which suggest that this may not have been another false summit.

World GDP likely shrunk in Q2 2022 – for the first time since the 2020 pandemic related decrease – owing to economic downturns in China, Russia and the US. Is bad news truly good news?

A pesar de la continua preocupación por el crecimiento mundial y la inflación, los mercados de capitales se recuperaron en julio: la renta variable mundial subió considerablemente, después de haber tocado el mínimo del año en junio. La deuda pública mundial también registró fuertes ganancias.

In the 9th edition of Mosaique Insights we take a closer look at what type of investments can thrive in challenging times and shed some light on the topic of inflation. We will also take you on a trip to the Nordics and introduce you to our new Rothschild & Co Switzerland Art Collection and Exhibition Series.

While dramatic daily fluctuations in stock market indices are alarming, the current volatility in bond markets is perhaps even more concerning. In this Strategy Blog we examine the relationship between these asset classes amid this challenging investment landscape.

La volatilidad siguió siendo elevada en las acciones y los bonos. La renta variable mundial cayó bruscamente, tocando brevemente un nuevo mínimo en lo que va de año a mediados de mes, junto con la deuda pública mundial.

While the overriding narrative often deems ‘sticking to one’s guns’ as an admirable choice, as investors, we recognise the value of altering one’s approach where necessary. In this Quarterly Letter we discuss the language and psychology behind this phenomenon, and why changing your mind is so essential to long-term investing.

While dramatic daily fluctuations in stock market indices are alarming, the current volatility in bond markets is perhaps even more concerning. In this Strategy Blog we examine the relationship between these asset classes amid this challenging investment landscape.

Property prices have surged to record levels. However, amid rising interest rates, supply-side issues, and ongoing inflationary pressure, investing in real estate looks increasingly risky. In this Strategy blog, we examine the factors underpinning this appetite from investors, and how long we can expect it to last.