4 to 10 March: Global growth concerns return to the centre of the stage

Global growth returned to the limelight, as the key reason for global investor sentiment to deteriorate. Truth be told, it is quite difficult to read anything positive into headlines without taking a closer look at the details – and we all know that markets sometimes tend to be superficial and ignore details. The headlines were the following:

  • the NFP employment number in the US unexpectedly collapsed,
  • the European Central Bank panicked and made a complete policy U-turn worrying that the Euro Area’s economy is on the brink of stagnation (did not dare to say the R word though),
  • Chinese foreign trade surprised to the downside, as exports and imports contracted to a greater extent than expectations foresaw,
  • scary Brexit-related headlines and its – assumingly – disastrous economic implications continue to weigh on market sentiment.

Yes, we agree that the headline themselves are awfully disappointing. However, the global economy is not in such a bad shape – from a fundamental point of view – as markets deem, in our opinion. We remain of the view that as long as political noises persist and headline macro figures do not improve, investors are likely to remain jittery. Once the unwanted noise fades, fundamentals may return to the driving seat.

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