Asset Allocation for March 2016

February was marked by commodity prices stabilization and corporate earnings season ending.

Weak results of earnings season in US has improved the possibility of bear market resumption. Now only the hope that FED would not hike rate even for once during 2016 holds the market away from the downfall. Therefore, we have a stalemate situation when investors feel better if the economy continue to slowdown.

Europe suffers from deflation that could motivate ECB’s Mario Draghi to adopt new monetary stimulus in March – bad news for euro.

Oil prices probably have already bottomed but we don’t see real drivers for commodity prices to quick rebound.

Threat and challenges in world markets:
- Liquidity crisis in global markets could become the 4th wave of crisis (the last one in current crisis cycle).
- Acceleration of economic slowdown in China.
- Rapid destabilization in the middle East and jump in oil prices.

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