Bringing you live news and features since 2013
Bringing you news, views and analysis since 2013
hot air balloon

7632

Inflation set to remain steady in Europe, says Dexia

RELATED TOPICS​

Dexia Asset Management (Dexia AM) has today launched its latest special report on inflation titled “The return of inflation expectations”. The report considers the inflation outlook for 2011 and looks specifically at the investment case for Europe, the US and Emerging Markets.

 

According to the report, growth remains solid on average across the Eurozone but inflation is up since last year [2.65 in March (estimate), up from 2.4% in February and 1.9% in November], with a wide disparity between countries e.g. 1.7% for Ireland vs. 4% and 5.2% for the UK and Greece respectively. The UK faces a choppy rest of the year, with inflation currently 200bps over BoE target.

Looking ahead in Europe, the report says that inflation is likely to remain under control but this will be dependent on the extent to which agricultural and energy commodity prices rise.

n the US meanwhile, rising commodity prices are putting consumer prices under pressure – Dexia AM’s analysis estimates that the rise in gasoline prices, for example, could have a +0.7% point effect on the CPI if sustained. Despite this, elevated unemployment means that core inflation should remain contained.

In addition, while inflationary fears have receded slightly since the end of 2010 and the outlook in emerging economies varies from one region to another, they are collectively on the cusp of a new period of inflation as input price pressures intensify.

Sylvain De Bus, manager of the Dexia Bonds Euro Inflation Linked fund at Dexia Asset Management, says:  “In an uncertain inflationary environment like this, investors can benefit from the specific characteristics of inflation-linked bonds.” De Bus, added:  “With a range of strategies available that take inflation into account, including; inflation hedges, hedged shares, high dividend or commodities, investors can more effectively safeguard against unexpected inflation rises and even benefit from increased inflation.”  

Latest News

Amid a challenging fund-raising environment, regulatory changes and technological advancements, distribution strategy is more important..
Theta Capital has launched its fourth Theta Blockchain Ventures vehicle to invest in core blockchain..
Rabobank has completed a series of groundbreaking pilots to execute more than EUR2 billion in..

Related Articles

British pound coin
Fixed income’s return to favour following widespread interest rate rises has led to investors overcrowding sterling investment grade credit, delegates at the Pensions and Lifetime Savings Association investment conference have heard...
Fixed income’s return to favour following widespread interest rate rises has led to investors overcrowding sterling investment grade credit, delegates..
Sustainable Economy Top Panel
Europe is driving the growth in sustainable investment with global assets under management in ESG-labelled funds passing USD2.8 trillion...
Europe is driving the growth in sustainable investment with global assets under management in ESG-labelled funds passing USD2.8 trillion...
Pension funds
UK institutional investors are questioning the value of investing in private markets despite pressure from government to finance the country’s net zero and levelling up ambitions...
UK institutional investors are questioning the value of investing in private markets despite pressure from government to finance the country’s..
Juan Nozal, Mapfre Asset Management
Juan Nozal, Fixed Income Portfolio Manager at MAPFRE Asset Management, talks about the outlook for fixed income assets over 2024, in what he predicts will be an outstanding year for this asset class...
Juan Nozal, Fixed Income Portfolio Manager at MAPFRE Asset Management, talks about the outlook for fixed income assets over 2024,..
Subscribe to the Institutional Asset Manager newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by