Asset Allocation for March 2017

In February the UK has not yet begun the procedure of Brexit while Greece did succeed to negotiate with IMF on cooperation and support.

The process of implementation Brexit criteria and terms is being delayed that boost investor’s mistrust to pound sterling. GPBUSD fell 3.1% to 1.24 level in February and it’s seemed to tumble further.

Greek government succeeded to negotiate with IMF on cooperation and made payments upon restructured Eurobonds. 2Yr Greek bonds yield fell from 10.2% to 7.8% after IMF agreement that had become the biggest rally since 2015.

In March the season of elections to start in Europe after parliamentary battle begins in the Netherlands. Support of ultra-right parties decreasing because of Europeans are too negative on Donald Trump’s radical policy in US.

Also we expect rate hike by FED in March from 0.75% to 1.00%.

Threat and challenges in world markets:
  -  BREXIT aftermath – EU disruption and political crisis
  -  Monetary policy tightening by US FED
  -  Cold “cyber” war between US and Russia

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