‘Interest rates knock on heaven’s door’, Stamina AM says
French asset manager Stamina Asset Management, part of Primonial group, payed tribute to 2016 Nobel prize in litterature’s winner Bob Dylan while commenting the evolution of interest rates worldwide.
The manager assessed that negative interest rates turning positive would be assimilated as heaven in the current low-rate environment. Hope is permitted, Stamina AM believes, as it observes a few European interest rates such as that of the 10-year Bund have been back to slightly positive in recent weeks.
Stamina AM explained it is impossible to see the end of that momentum even though markets would argue the increase in interest rates could reach a ceiling over the short term because of structural weaknesses across the world.
The company estimated the rise of interest rates could pursue if central banks become less accommodative.
Stamina AM stays away of developed markets government bonds but could consider further allocation if the momentum lasts longer than expected and once interest rates will reach higher valuations than current ones.
But it is too early to act as heaven’s door is not much open yet, Stamina AM concluded.