Latest news with #FrancescoSandrini
Zawya
26-05-2025
- Business
- Zawya
Tariff-fogged markets leave investors flying blind
LONDON - Global investors admit to flying blind in markets roiled by erratic U.S. trade rhetoric and chaotic economic forecasting, stressing that placing long-term bets was harder now than at any time since the 2020 COVID-19 crisis. Anxieties over whether a 90-day White House-China tariff truce will hold, plus U.S. budget gaps and whipsawing currencies have made investors extremely cautious about where to put their money. Markets have been on a rollercoaster ride for weeks, with world stocks rallying 20% from more than one-year lows hit after U.S. President Donald Trump's April 2 tariff bombshell, after slumping 15% in three sessions. The turbulence continued on Friday with a sudden selloff in stocks after Trump said he was recommending a straight 50% tariff on goods from the European Union. A day earlier, government debt saw a sudden slump, spooking long-term investors out of markets that they fear have lost the anchoring force of consensus forecasts. "There is no macroeconomic visibility," said Francesco Sandrini, Italy CIO at Europe's biggest asset manager Amundi. He said he was following short-term speculative market trends instead of taking a stance on the global outlook. "You may be right on the end-game for economics and valuations in the long term but the risk is that it is going to be very painful in the short term." Other money managers said they had shifted global portfolios onto neutral settings, which ensure the balance of investments is not tilted towards any particular scenario, because even if their views were right, assets were not trading reliably. "There is no reward for taking any risk at the moment," Lombard Odier Investment Managers head of macro Florian Ielpo said. CTA hedge funds, which mirror prevailing market trends, are also not taking strong directional bets on stocks or bonds right now, J.P. Morgan data on Tuesday showed. UNPREDICTABLE This week, yields on 30-year U.S. Treasuries, rocketed to 5.013% from just 4.84% two weeks ago and equivalent Japanese yields hit record highs, in abrupt moves that analysts have struggled to define exact reasons for. Earlier this month, trade war tremors also sparked a speculative buying frenzy of Taiwan's dollar which rose 8% against the U.S. dollar in two days. John Roe, head of multi-asset funds at Britain's biggest investor L&G, said 2020's pandemic-induced market was "the last time things were so totally unpredictable." He said he had briefly bought Wall Street stocks in early April, then reverted to a neutral stance on global equities and government bonds earlier this month. Economists back in early April were inputting U.S.-China trade war scenarios into their models which produced global recession forecasts, Columbia Threadneedle Investments senior economist Anthony Willis said. Then, the White House and Beijing agreed to suspend reciprocal levies cheering markets. But the nervousness resurfaced this week after U.S. Treasury Secretary Scott Bessent threatened unspecified trading partners with maximum tariffs. "We've got all these scenarios and then it turns out a week later you might as well just chuck them into the bin," Willis said. Barclays, for example, last week scrapped its forecast for the U.S. to enter recession this year. Economic modeling following the COVID-19 was in some ways easier, said Willis, because events such as the arrival of vaccines provided "clear signals" for the economic outlook. WHIPSAWED HSBC Asset Management global chief strategist Joe Little expected further bursts of unusual price action in "whipsawed" markets. "This makes it very difficult (for long-term investors) in terms of running positions and maintaining conviction," he said. Amundi's Sandrini said he saw the risk of markets moving in "very harmful swings," because of debt-fuelled speculation. Flows into leveraged equity index trackers, which deploy borrowed capital in a manner that amplifies market gains and losses, hit a record high in late April as U.S. stocks surged, LSEG Lipper data showed. Citi strategists said trading in risky U.S. derivatives dubbed zero-day options, which offer cheap exposure to stock market moves and can exacerbate market routs, has also hit a record high. "The most dangerous thing that could have happened in markets was the (equity) rebound," said Pictet Wealth Management CIO César Pérez Ruiz, arguing this had lured in amateur traders who might panic sell at the first sign of a U.S. downturn. The Bank for International Settlements warned in March that macro-economic U.S. surprises were "inducing larger market responses abroad." But bearish long-term investors also faced stampedes of retail investors and trend-following hedge funds moving against them each time markets turned briefly positive, Lombard Odier's Ielpo argued. "We need to acknowledge that what we know about investing does not apply at the moment," he said.
Khaleej Times
25-05-2025
- Business
- Khaleej Times
Tariff-fogged markets leave investors flying blind
Global investors admit to flying blind in markets roiled by erratic U.S. trade rhetoric and chaotic economic forecasting, stressing that placing long-term bets was harder now than at any time since the 2020 COVID-19 crisis. Anxieties over whether a 90-day White House-China tariff truce will hold, plus U.S. budget gaps and whipsawing currencies have made investors extremely cautious about where to put their money. Markets have been on a rollercoaster ride for weeks, with world stocks rallying 20% from more than one-year lows hit after U.S. President Donald Trump's April 2 tariff bombshell, after slumping 15% in three sessions. The turbulence continued on Friday with a sudden selloff in stocks after Trump said he was recommending a straight 50% tariff on goods from the European Union. A day earlier, government debt saw a sudden slump, spooking long-term investors out of markets that they fear have lost the anchoring force of consensus forecasts. "There is no macroeconomic visibility," said Francesco Sandrini, Italy CIO at Europe's biggest asset manager Amundi. He said he was following short-term speculative market trends instead of taking a stance on the global outlook. "You may be right on the end-game for economics and valuations in the long term but the risk is that it is going to be very painful in the short term." Other money managers said they had shifted global portfolios onto neutral settings, which ensure the balance of investments is not tilted towards any particular scenario, because even if their views were right, assets were not trading reliably. "There is no reward for taking any risk at the moment," Lombard Odier Investment Managers head of macro Florian Ielpo said. CTA hedge funds, which mirror prevailing market trends, are also not taking strong directional bets on stocks or bonds right now, J.P. Morgan data on Tuesday showed. UNPREDICTABLE This week, yields on 30-year U.S. Treasuries, rocketed to 5.013% from just 4.84% two weeks ago and equivalent Japanese yields hit record highs, in abrupt moves that analysts have struggled to define exact reasons for. Earlier this month, trade war tremors also sparked a speculative buying frenzy of Taiwan's dollar which rose 8% against the U.S. dollar in two days. John Roe, head of multi-asset funds at Britain's biggest investor LG, said 2020's pandemic-induced market was "the last time things were so totally unpredictable." He said he had briefly bought Wall Street stocks in early April, then reverted to a neutral stance on global equities and government bonds earlier this month. Economists back in early April were inputting U.S.-China trade war scenarios into their models which produced global recession forecasts, Columbia Threadneedle Investments senior economist Anthony Willis said. Then, the White House and Beijing agreed to suspend reciprocal levies cheering markets. But the nervousness resurfaced this week after U.S. Treasury Secretary Scott Bessent threatened unspecified trading partners with maximum tariffs. "We've got all these scenarios and then it turns out a week later you might as well just chuck them into the bin," Willis said. Barclays, for example, last week scrapped its forecast for the U.S. to enter recession this year. Economic modeling following the COVID-19 was in some ways easier, said Willis, because events such as the arrival of vaccines provided "clear signals" for the economic outlook. WHIPSAWED HSBC Asset Management global chief strategist Joe Little expected further bursts of unusual price action in "whipsawed" markets. "This makes it very difficult (for long-term investors) in terms of running positions and maintaining conviction," he said. Amundi's Sandrini said he saw the risk of markets moving in "very harmful swings," because of debt-fuelled speculation. Flows into leveraged equity index trackers, which deploy borrowed capital in a manner that amplifies market gains and losses, hit a record high in late April as U.S. stocks surged, LSEG Lipper data showed. Citi strategists said trading in risky U.S. derivatives dubbed zero-day options, which offer cheap exposure to stock market moves and can exacerbate market routs, has also hit a record high. "The most dangerous thing that could have happened in markets was the (equity) rebound," said Pictet Wealth Management CIO César Pérez Ruiz, arguing this had lured in amateur traders who might panic sell at the first sign of a U.S. downturn. The Bank for International Settlements warned in March that macro-economic U.S. surprises were "inducing larger market responses abroad." But bearish long-term investors also faced stampedes of retail investors and trend-following hedge funds moving against them each time markets turned briefly positive, Lombard Odier's Ielpo argued. "We need to acknowledge that what we know about investing does not apply at the moment," he said.
Reuters
23-05-2025
- Business
- Reuters
Tariff-fogged markets leave investors flying blind
LONDON, May 23 (Reuters) - Global investors admit to flying blind in markets roiled by erratic U.S. trade rhetoric and chaotic economic forecasting, stressing that placing long-term bets was harder now than at any time since the 2020 COVID-19 crisis. Anxieties over whether a 90-day White House-China tariff truce will hold, plus U.S. budget gaps and whipsawing currencies have made investors extremely cautious about where to put their money. Markets have been on a rollercoaster ride for weeks, with world stocks rallying 20% (.MIWD00000PU), opens new tab from more than one-year lows hit after U.S. President Donald Trump's April 2 tariff bombshell, after slumping 15% in three sessions. The turbulence continued on Thursday with a sudden selloff in global government debt, the latest event to spook long-term investors out of markets that they fear have lost the anchoring force of consensus forecasts. "There is no macroeconomic visibility," said Francesco Sandrini, Italy CIO at Europe's biggest asset manager Amundi. He said he was following short-term speculative market trends instead of taking a stance on the global outlook. "You may be right on the end-game for economics and valuations in the long term but the risk is that it is going to be very painful in the short term." Other money managers said they had shifted global portfolios onto neutral settings, which ensure the balance of investments is not tilted towards any particular scenario, because even if their views were right, assets were not trading reliably. "There is no reward for taking any risk at the moment," Lombard Odier Investment Managers head of macro Florian Ielpo said. CTA hedge funds, which mirror prevailing market trends, are also not taking strong directional bets on stocks or bonds right now, J.P. Morgan data on Tuesday showed. This week, yields on 30-year U.S. Treasuries , rocketed to 5.013% from just 4.84% two weeks ago and equivalent Japanese yields hit record highs, in abrupt moves that analysts have struggled to define exact reasons for. Earlier this month, trade war tremors also sparked a speculative buying frenzy of Taiwan's dollar which rose 8% against the U.S. dollar in two days. John Roe, head of multi-asset funds at Britain's biggest investor L&G, said 2020's pandemic-induced market was "the last time things were so totally unpredictable." He said he had briefly bought Wall Street stocks in early April, then reverted to a neutral stance on global equities and government bonds earlier this month. Economists back in early April were inputting U.S.-China trade war scenarios into their models which produced global recession forecasts, Columbia Threadneedle Investments senior economist Anthony Willis said. Then, the White House and Beijing agreed to suspend reciprocal levies cheering markets. But the nervousness resurfaced this week after U.S. Treasury Secretary Scott Bessent threatened unspecified trading partners with maximum tariffs. "We've got all these scenarios and then it turns out a week later you might as well just chuck them into the bin," Willis said. Barclays, for example, last week scrapped its forecast for the U.S. to enter recession this year. Economic modeling following the COVID-19 was in some ways easier, said Willis, because events such as the arrival of vaccines provided "clear signals" for the economic outlook. HSBC Asset Management global chief strategist Joe Little expected further bursts of unusual price action in "whipsawed" markets. "This makes it very difficult (for long-term investors) in terms of running positions and maintaining conviction," he said. Amundi's Sandrini said he saw the risk of markets moving in "very harmful swings," because of debt-fuelled speculation. Flows into leveraged equity index trackers, which deploy borrowed capital in a manner that amplifies market gains and losses, hit a record high in late April as U.S. stocks surged, LSEG Lipper data showed. Citi strategists said trading in risky U.S. derivatives dubbed zero-day options, which offer cheap exposure to stock market moves and can exacerbate market routs, has also hit a record high. "The most dangerous thing that could have happened in markets was the (equity) rebound," said Pictet Wealth Management CIO César Pérez Ruiz, arguing this had lured in amateur traders who might panic sell at the first sign of a U.S. downturn. The Bank for International Settlements warned, opens new tab in March that macro-economic U.S. surprises were "inducing larger market responses abroad." But bearish long-term investors also faced stampedes of retail investors and trend-following hedge funds moving against them each time markets turned briefly positive, Lombard Odier's Ielpo argued. "We need to acknowledge that what we know about investing does not apply at the moment," he said.
Yahoo
23-05-2025
- Business
- Yahoo
Analysis-Tariff-fogged markets leave investors flying blind
By Naomi Rovnick LONDON (Reuters) -Global investors admit to flying blind in markets roiled by erratic U.S. trade rhetoric and chaotic economic forecasting, stressing that placing long-term bets was harder now than at any time since the 2020 COVID-19 crisis. Anxieties over whether a 90-day White House-China tariff truce will hold, plus U.S. budget gaps and whipsawing currencies have made investors extremely cautious about where to put their money. Markets have been on a rollercoaster ride for weeks, with world stocks rallying 20% from more than one-year lows hit after U.S. President Donald Trump's April 2 tariff bombshell, after slumping 15% in three sessions. The turbulence continued on Thursday with a sudden selloff in global government debt, the latest event to spook long-term investors out of markets that they fear have lost the anchoring force of consensus forecasts. "There is no macroeconomic visibility," said Francesco Sandrini, Italy CIO at Europe's biggest asset manager Amundi. He said he was following short-term speculative market trends instead of taking a stance on the global outlook. "You may be right on the end-game for economics and valuations in the long term but the risk is that it is going to be very painful in the short term." Other money managers said they had shifted global portfolios onto neutral settings, which ensure the balance of investments is not tilted towards any particular scenario, because even if their views were right, assets were not trading reliably. "There is no reward for taking any risk at the moment," Lombard Odier Investment Managers head of macro Florian Ielpo said. CTA hedge funds, which mirror prevailing market trends, are also not taking strong directional bets on stocks or bonds right now, J.P. Morgan data on Tuesday showed. UNPREDICTABLE This week, yields on 30-year U.S. Treasuries, rocketed to 5.013% from just 4.84% two weeks ago and equivalent Japanese yields hit record highs, in abrupt moves that analysts have struggled to define exact reasons for. Earlier this month, trade war tremors also sparked a speculative buying frenzy of Taiwan's dollar which rose 8% against the U.S. dollar in two days. John Roe, head of multi-asset funds at Britain's biggest investor L&G, said 2020's pandemic-induced market was "the last time things were so totally unpredictable." He said he had briefly bought Wall Street stocks in early April, then reverted to a neutral stance on global equities and government bonds earlier this month. Economists back in early April were inputting U.S.-China trade war scenarios into their models which produced global recession forecasts, Columbia Threadneedle Investments senior economist Anthony Willis said. Then, the White House and Beijing agreed to suspend reciprocal levies cheering markets. But the nervousness resurfaced this week after U.S. Treasury Secretary Scott Bessent threatened unspecified trading partners with maximum tariffs. "We've got all these scenarios and then it turns out a week later you might as well just chuck them into the bin," Willis said. Barclays, for example, last week scrapped its forecast for the U.S. to enter recession this year. Economic modeling following the COVID-19 was in some ways easier, said Willis, because events such as the arrival of vaccines provided "clear signals" for the economic outlook. WHIPSAWED HSBC Asset Management global chief strategist Joe Little expected further bursts of unusual price action in "whipsawed" markets. "This makes it very difficult (for long-term investors) in terms of running positions and maintaining conviction," he said. Amundi's Sandrini said he saw the risk of markets moving in "very harmful swings," because of debt-fuelled speculation. Flows into leveraged equity index trackers, which deploy borrowed capital in a manner that amplifies market gains and losses, hit a record high in late April as U.S. stocks surged, LSEG Lipper data showed. Citi strategists said trading in risky U.S. derivatives dubbed zero-day options, which offer cheap exposure to stock market moves and can exacerbate market routs, has also hit a record high. "The most dangerous thing that could have happened in markets was the (equity) rebound," said Pictet Wealth Management CIO César Pérez Ruiz, arguing this had lured in amateur traders who might panic sell at the first sign of a U.S. downturn. The Bank for International Settlements warned in March that macro-economic U.S. surprises were "inducing larger market responses abroad." But bearish long-term investors also faced stampedes of retail investors and trend-following hedge funds moving against them each time markets turned briefly positive, Lombard Odier's Ielpo argued. "We need to acknowledge that what we know about investing does not apply at the moment," he said. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Zawya
27-01-2025
- Business
- Zawya
Renewed inflation worries help drive oil price rally
LONDON - Investors are snapping up crude oil futures as a hedge against the risk that U.S. President Donald Trump's threatened trade tariffs will cause a resurgence in global inflation, adding momentum to a recent rally in oil prices sparked by a tightening of sanctions on Russia. Oil is a popular inflation hedge because energy is a important component of Consumer Price Index (CPI) baskets and also feeds into them indirectly through goods and services costs. That means, however, that the large-scale adoption of such a strategy could itself help push consumer prices higher. Fund managers have built up the largest net long position in crude oil futures in nine months, according to data from the Commodity Futures Trading Commission. "This is the best hedge at the inflation in the U.S. proves to be more resistant," said Francesco Sandrini, head of multi-asset strategies at Amundi, Europe's biggest asset manager overseeing 2.2 trillion euros ($2.29 trillion). Amundi is increasing its commodities holdings, buying oil and metals, he said. In an environment where U.S. stock markets came under pressure at the beginning of the year and benchmark Treasury yields hit 15-month highs, prices of oil and other commodities considered higher risk investments would typically be expected to fall, particularly as a stronger U.S. dollar made them more expensive for holders of other currencies. However, Brent crude and U.S. WTI futures prices are up around 5% and 4%, respectively, so far this year and recently traded at six-month highs. While oil traders are focused on a tightening of supply from a fresh round of sanctions on Russia's energy industry, some investors are concerned inflation may pick up if Trump presses ahead with threatened tariffs on countries such as Mexico, Canada and China despite the new president's vow to lower consumer prices. Money managers' net long position in a basket of commodities that includes energy, metals and grains has risen close to a three-year high, an analysis of CFTC data by Saxo Bank shows, with crude contracts drawing the most demand. According to Goldman Sachs, compared to other commodities energy has historically provided the strongest inflation-adjusted returns when consumer prices have risen faster than expected. Energy forms 6.4% of the U.S. consumer price index (CPI) and 9.9% of the euro zone equivalent, according to the U.S. Bureau of Labor Statistics and Eurostat respectively. If inflation is accelerating, it is likely that energy prices are picking up, which can offset losses. However, Ilia Bouchouev, former president of hedge fund Koch Global Partners and author of Virtual Barrels: Quantitative Trading in the Oil Market, said inflation hedging can be a "vicious circle". "Investors buy oil futures to hedge against the effect of rising consumer prices, but this activity can push oil prices higher, fueling more inflation and more hedging trades, and so on." 'STICKY' INFLATION Recent economic data, such as the U.S. jobs report, has also fanned inflation fears, with a January University of Michigan survey showing an uptick in consumers' price expectations over both the short- and medium-term. "With strong growth combined with sticky inflation, markets are now expecting the Fed to be more cautious. Higher oil prices also don't bode well for the inflation outlook," said Shaniel Ramjee, co-head of multi-asset at Pictet Asset Management in London. As stocks and bonds fell in tandem, an unusual market phenomenon, demand rose for investments that are considered less likely to lose value at the same time. "Commodities are a good diversifier, up to a point," said John Roe, head of multi-asset at Legal & General Investment Management. "But if the inflation scares lead to growth concerns, then suddenly they can get caught up in it," he added, noting the impact on demand. The oil market rally has also pulled in momentum trading funds, according to Saxo Bank's analysis, while Bouchouev noted that commodity trading advisors (CTAs), which typically trade on technical signals and had largely been betting on a fall in crude prices, were flipping their positions, helping to further boost prices. (Reporting by Anna Hirtenstein, additional reporting by Karin Strohecker, graphic by Ahmad Ghaddar, editing by Alex Lawler and Kirsten Donovan)
