|
By Mark DOWDING, CIO at BlueBay Asset Management
As the world faces enormous challenges, financial markets put ugly recession thoughts aside and enjoy some love. The melt-up in risk asset prices continued over the past week, fuelled by abundant liquidity. As fears relating to Covid-19 recede, it seems that, such has been the magnitude of intervention by global policymakers, so we are in a world where there is now ‘too much money chasing too few assets’ (to paraphrase the monetarist Milton Friedman).
Central banks purchases are fuelling asset price inflation as market technicals dominate. Yet this rally is coming against a backdrop in which the macroeconomy remains in a pretty dark place. Simple evidence of the extent of the economic malaise...
|