Time to stock up on defensive assets for a volatile 2H18, says State Street

SINGAPORE (June 25): State Street Corporation advises investors to start adopting a more defensive stance on expectations of global volatility in 2H18, as the environment becomes more challenging for risky assets such as such as global equities, high-beta developed market currencies, and emerging markets (EMs) in general.

In a Monday release, Lee Ferridge, head of Global Macro Strategy for North America at State Street Global Markets, says he foresees rising inflation and falling liquidity to create a challenging environment for risky assets going forward.

“Despite lacklustre fundamentals in the post-2008 world, markets have enjoyed strong, persistent gains. This dichotomy has been created by central banks, as global quantitative easing (QE) has created excess liquidity, pushing investors into ever riskier assets. Now, however, this environment is ending. During the remainder of 2018 global central banks will be removing, not adding liquidity,” explains Ferridge.  

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