Asset Allocation for April 2016

March was the month of commodity assets. The prices of oil, iron ore and other industrial metals, as well as grains and softs have grown sharply.

Such a dynamic brought buyers on equity markets that led to S&P500 hike to Y2015 close levels. More than 90% of stocks in US have refreshed their 50-days maximums. It’s been the best rate since Y2013.

To our view equity market in US is overbought short-term that could lead to buyers activity decreasing. Besides, US and EU economies are growing to slow and inflation’s going down. China is bumping into credit market bubble because PBoC has taken a very fast tempo of money base extension. Such measures led to low inflation growth but other key macroeconomic indicators continued to decrease.

Threat and challenges in world markets:
  - Presidential Elections in US (8th November 2016).
  - Credit market bubble in China.
  - Rapid destabilization in the middle East and jump in oil prices.
  - BREXIT – UK referendum (23th June 2016).

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