Asset Allocation for April 2017

US FED raised rate from 0.5% to 0.7% and marked two more possible hikes till the year end.

American regulator’s actions were expected and had no sharp impact on market assets. Contrariwise Janet Yellen commentaries on FED policy affected markets as she had confirmed the readiness for further hikes but mentioned the slower pace of rate growth.

Brief correction in assets prices occurred after Trump’s administration has voted down the healthcare reform statement. It is the first fundamental step that’s needed to start tax reform in US. To recall, investors and corporations are awaiting new tax rules very much and stocks have already grown up highly on such expectations.

Among main events in April we undoubtedly need to mention the 1st tour of Presidential elections in France. Four candidates could win the race according to the polls. They are Emmanuel Macron (the most likely winner), Marine Le Pen, Francois Fillon and Jean-Luc Melanchon. We expect increasing in volatility in STOXX and pressure on French bonds.

Threat and challenges in world markets:
-  BREXIT aftermath – EU disruption and political crisis
-  Monetary policy tightening by US FED
-  Presidential race in France

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