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The complex phase the markets are going through, generated by the rare combination of macroeconomic and geopolitical variables, accentuates the guiding role of central banks The Fed seems inclined to continue its policy of tightening rates unless one of the following conditions occurs: clear evidence that inflation is falling, a slowdown in the labour market, a liquidity crisis in the system A continuation of the rate hike above 4.9% would have further implications for all asset classes: yields (which usually peak just before the end of the rate hike cycle), currencies, commodities, the dollar, gold and equities ff “Don’t fight the central banks”: the adage of financial investors has never been so topical. The complex phase the markets are going through, generated by the… Read more

Will the EU price cap create investment opportunities? The uncontrolled raise of gas prices and its volatility are putting Utility companies under unprecedented financial pressure. Extraordinary credit lines to guarantee wholesale purchases will have to be put in place Governments are trying to impose a limit (cap) on the purchase price of Russian gas but the agreement is unlikely to become operational before January 2023 The risk is to be in a situation like that of post Lehman bankruptcy, Utilities will need emergency intervention by central banks and governments. A situation that which might create the right conditions for equity and bond investments It is also likely, in perspective, that investors and industrial customer demand will move towards the incumbent suppliers, giving way to… Read more

We have reached the halfway point of the year, an opportune moment for a first evaluation of performance and what we can expect from the second half. Simplify 02 started the year with a reduced equity component (and focused towards energy stocks) and relatively high cash. It seemed clear to us, at the end of 2021, that equity valuations had reached unsustainable levels and that there were concrete prospects of a significant rise in inflation. Holding a large cash position was counterintuitive but paid as both equity and bonds were pushed down by inflationary and monetary policy fears. Maintaining cash allows us to be ready to seize future opportunities. The strategy turned out to be right: in the first part of the year, equities… Read more

We are moving towards overcoming the of the supply chain bottlenecks, one of the drivers of price growth Indicators point to easing of pressures, normalization of the supply side and replenishment of inventories Deflationary trends also appeared in the first part of the year, starting with a slowdown in global growth, expected to be 50% lower than in 2021 In the meantime, despite forecasts to the contrary, globalization continues to exercise the function of keeping price growth at bay The uncertainty created by political decisions aimed to form a new geopolitical order is high (as demonstrated by the sanctions on Russia) even if, in a longer term perspective, the deflationary forces appear more robust ff Several signs indicate that inflation, one of the most… Read more