Japan faces huge economic and geopolitical issues. Demographics pose the biggest single challenge to efforts to maintain living standards, as an increasing share of resources is devoted to pension provision.
Once the major political risk hurdles in the euro area have been cleared – in our base case with a good outcome for the euro area – we expect investors to warm up to European equities, which fundamentally look clearly more attractive than their US peers. We therefore analyse which countries of the European equity market look particularly attractive.
Return of multi-asset diversification?
In 2015, a spike in cross-asset correlation caused large drawdowns in many multi-asset strategies (Chart 1). The positive risk adjusted year-on-year performances of both the Commerzbank Global Multi Asset Risk Control Index and Commerzbank Frontier 5%RC ER Index, which both give dynamic exposure to a diverse multi-asset basket, suggests that cross-asset diversification has become a reliable tool once more.
In early December, 10 OPEC and 11 non-OPEC countries agreed to joint production cuts totalling just shy of 1.8 million barrels per day for the first six months of 2017. This step was aimed primarily at restoring balance on the oil market and at stabilising the oil price.