Views and Ideas

Robust Q3 GDP growth for the US, boosted by strong exports

31 octubre 2016

We had a busy week ending with long expected US Q3 GDP. But before commenting this figure, let us come back on core fixed income markets which have sold off this week.

The collapse has been ignited by a better UK GDP report. This move was then maintained by the European central bank’s president saying that negative rates for a long period of time are is not advisable. Core rates have moved up 15 to 20bps this week and almost 30bps MTD.

Economic data has been decent this week: good Euro Area PMI, US PMI accelerating and to finish with, US Q3 GDP at 2.9% vs 2.6% expected. The breakdown was rather comforting even if consumption contribution slowed down. These reports have of course helped as well fixed income markets to drop.

US earnings season is now half way through, until now the

  • 275/500 firms have reported in S&P 500
  • 75% are above, 6% in line and 19% below expectations. That’s better than usual
  • YoY growth is +3% vs -1% expected before the season

The question everyone is asking is where does this fixed income correction stops? To our eyes it is probably close to the end, at least for the next few weeks:

  • The move was violent, sustained by systematic models deleveraging: markets are now clearly oversold, and our contrarian bias pushes us to like this kind of positions
  • Investors are not heavily invested in core fixed income. They are very long credit, but for many weeks they have increased their cash holdings vs govies.
  • We do not believe in an ECB tapering and think QE will be extended. Sure thing, inflation will rise through base effects in the coming months but remaining below ECB target.

La Française’s Essentiel Markets brings you an insightful analysis of the latest financial news by François Rimeu, Head of Total Return at La Française Asset Management.

Les sites du groupe
Mis favoritos

Las marcas se guardan con ayuda de las cookies, su supresión en su navegador borrará sus preferencias.

El grupo La Française permite el acceso a los conocimientos técnicos de varias empresas de gestión de todo el mundo. Con el fin de obtener la información más adecuada, hemos desarrollado una interfaz con la totalidad de la oferta de acuerdo a su perfil y a su país de residencia.
Indique su perfil
1
País
2
Idioma
3
Perfil
País de residencia
Idioma
Tipología de perfil
<p class="new-disclaimer__legal-notice">Antes de consultar el contenido de esta página web, rogamos lea atentamente las informaciones « <a href="es/avisos-legales/" target="_blank">avisos legales</a> » y « <a href="es/informacion-reglementaria/" target="_blank">noticias legales</a> » para su protección y en su propio interés. Estas informaciones explican ciertas restricciones legales y reglamentarias aplicables a todos los inversores, particulares o profesionales, sujetos a la legislación local. He leído y acepto las modalidades de utilización de esta página web desde el mismo momento en el que me conecto, como no profesional o como profesional. En el marco de aplicación de la Directiva europea relativa a los Mercados de Instrumentos Financieros (« MIF »), rogamos indique a qué categoría de inversor pertenece:</p>