Bloomberg published a list of the five main threats to 2017 for global markets according to the risk of investors.
One of the risks investors believe the rising yield on the bonds. The yield on the global bond market reached a low point in mid-2016 and then grow (prices, respectively, fall). “The growth potential of bond prices is currently very limited and the downside potential is great — you can lose a lot,” said Bloomberg investment Director of the Paris management company OFI Asset Management Jean Marie Mercadal. The yields on bonds are rising on the backdrop of improving macroeconomic conditions in the U.S. and Europe, and the return of inflation after years of deflation pressures. Because of this, investors debt markets may suffer losses, and companies becomes less profitable to take.
If yields continue to rise, this may end a 30-year bullish trend in the global market of fixed income instruments, writes in the February survey of the Economist Intelligence Unit (EIU). This is facilitated by expectations of inflationary policies of the United States under President Donald trump.
The experts also referred to the threat of excessive strengthening of the U.S. dollar, which may result in harm to exporting countries and undermine their recovery from the long crisis in the world economy. In addition, investors will begin to invest in the dollar if it is strengthening, while avoiding the weakening of local currencies.
Another point in the text Bloomberg indicated the possible frustration of the policies of U.S. President Donald trump. “Markets have high expectations associated with the policy of trump and there is a risk of disappointment in the implementation of this policy, if it is not as strong as expected, or it will slow down Congress”, — said the Agency strategist of the investment company NN Investment Partners Patrick Munna. Bloomberg stressed that most of the stock indices demonstrated growth after winning trump in the presidential elections.
According to experts, also to the negative consequences that can result the slowdown of China’s economy. This will be reflected primarily on mining and manufacturing goods. On the list of threats risk-investors also mentioned the looming crisis in the securities market and the policy of the Federal reserve system (FRS). Experts expect that in March the fed will raise the key rate. Continuation of office of such a policy may lead to curb the growth of the economy and the reluctance of investors to invest in risky assets.