October 3rd, 2016
September was all about central banks.
As expected the Fed stayed on hold, the ECB and the BoE took advantage of relatively calm market conditions to mark a pause, while the BoJ attempted to persuade investors it was capable to support activity and reach its inflation target by twisting rather than increasing its asset purchase program.
We view the BoJ action as a recognition that the central bank is getting short of ammunition and rather counting on fiscal stimulus by the government. This reinforces our conviction that the time to go back into Japanese assets has still not come.
For the rest, major central banks have yet again shown their market friendly commitment. With regards to the Fed, we could argue that Mrs. Yellen is missing the train, and that it could have negative consequences over time, but from an investment standpoint, this dovishness continues to support yield generating investments/proxies.
Please find attached our complete analysis: AlphaSwiss Partners Market Update September 2016