Free replay clip: Why are financial conditions so benign?

  • Free clip from first ten minutes of 2 May webinar
  • The exuberance in risk assets is less a consequence of a stronger economy than a driver of it
  • The expectation of rate easing was never critical - which is why the exuberance has largely persisted even as yields have backed up
  • It is instead the direct consequence of investor crowding following easy central bank balance sheet policy - and vulnerable to any reduction in CB liquidity

From the IMF to the FT to the ECB, everyone is wondering how it is that risk assets have gone from strength to strength since the lows in equities in late October. The IMF's best idea - that it was the expectation of rate easing - can't be right given that most of that strength has persisted even as central banks have dialled back on the likelihood and magnitude of easing. Indeed, equities are over 20% higher and IG spreads some 40bp tighter than when nominal and real yields were last at these levels in November.

Our webinar will describe what we think is a much better explanation, both for the extent of the rally and for the recent wobble - and then in the extended Q&A we'll deal with what it implies for the outlook.

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