Bond markets are now only expecting a single rise in rates by the end of 2016 and even that move is not entirely factored in. We are at one with the consensus market view and believe Janet Yellen will not risk surprising the markets by raising rates this week; we think she will hold fire until December's meeting.
Nevertheless, the Fed is likely to highlight the buoyant state of the jobs market as well as a moderate increase in inflation. This is why we at Edmond de Rothschild Asset Management are still cautious on the US yield curve, especially at the short end where a gradual rise in benchmark rates has still not been fully priced in. At the same time, we are positive on inflation-linked bonds as they could rebound if the Fed were to delay raising rates.
Eliezer Ben Zimra, Fund Manager - Asset Allocation and Sovereign Debt and Fund Manager of Edmond de Rothschild Bond Allocation
Written on 20/09/2016. Non-binding document. This document is for information only.
Disclaimer: The data, comments and analysis in this bulletin reflect the opinion of Edmond de Rothschild Asset Management (France) and its affiliates with respect to the markets and their trends, their regulation and tax treatment, on the basis of its own expertise, economic analysis and information currently known to it. However, they shall not under any circumstances be construed as comprising any sort of undertaking or guarantee whatsoever on the part of Edmond de Rothschild Asset Management (France). All potential investors should consult their service provider or advisor and exercise their own judgement independently of Edmond de Rothschild Asset Management (France) on the risks inherent to each investment and its suitability to their own personal and financial circumstances. To this end, investors must acquaint themselves with the key investor information document (KIID) or fund prospectus that is provided before any subscription and available at
www.edram.fr or on request from the head office of Edmond de Rothschild Asset Management (France).
Edmond de Rothschild Asset Management (france)|
47, rue du Faubourg Saint-Honoré - 75401 Paris Cedex 08|
Société anonyme à Directoire et Conseil de Surveillance au capital de 11 033 769 euros
Numéro d'agrément AMF GP 04000015 - 332 652 536 R.C.S. Paris
Tél : +33 (0)1 40 17 25 25 - Fax : +33 (0)1 40 17 24 42