Global Markets: Waiting for Change?

Eurizon SLJ Capital

In this episode of "The Long & Short," Neil Staines examines how global markets are bracing for shifts in monetary policy, fiscal dynamics, and the evolving trade landscape:

• Markets are increasingly pricing in a 25 basis point rate hike by the Bank of Japan in January 2025, reflecting a shift in Japan's monetary policy towards normalisation despite global divergences.
• UK fiscal pressures and a weaker-than-expected economy could prompt the Bank of England to cut rates faster than markets currently anticipate, especially under a benign inflation scenario.
• The U.S. Presidential Inauguration and the World Economic Forum in Davos will dominate global market sentiment, with significant attention on U.S. policy direction.
• Front-loading in global trade due to expected Trump tariffs adds complexity to growth and inflation expectations, creating the potential for market volatility if policies disappoint.
• Scott Bessent’s confirmation hearing highlighted a fiscally conservative bias with an emphasis on deficit reduction and tariffs as a multi-purpose tool for economic strategy.
• The uncertainty around trade policies may have a greater negative impact on global markets than tariffs themselves, emphasizing the high anticipation of Trump 2.0’s economic direction.

00:00 Introduction to The Long and Short
00:50 Monetary Policy in Japan
02:13 Waking the Doves?
03:56 Village People versus Global People
04:39 Buy Now, Pay Later?
05:43 Hearing differently?
07:47 The Long & Short of it…
08:29 Disclaimer and Legal Information

The opinions expressed in this podcast are those of the presenters and do not necessarily reflect the views of Eurizon SLJ Capital, Eurizon Capital, or the Intesa Sanpaolo Group. The information and opinions shared are intended solely for professional investors and should not be relied upon by other investors. Please note that the information provided in this recording is for informational purposes only and is not intended to be complete or constitute an offer to buy or sell securities or any derivatives. It has not been prepared in accordance with legal and regulatory requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. It does not constitute research on investment matters and should not be construed as containing any recommendation, advice or suggestion, implicit or explicit, for any investment strategy or financial instruments, the issuers of any financial instruments, or a solicitation, offer or financial promotion relating to any securities or investments. ESLJ and its affiliates do not assume any liability whatsoever for the contents of this podcast and do not make any representation or warranty as to the accuracy or completeness of any information contained in this communication.