Archive for November, 2018

Reuters: Eurizon SLJ Says Sterling to Rise to $1.55

London – Sterling might rally to a three-year high of $1.55 if a cliff-edge Brexit is avoided by the United Kingdom, Stephen Jen, co-chief investment officer of Eurizon SLJ Capital, a London-based hedge fund said on Wednesday.

With a lot of short positions rife in currency markets due to a rush by investors and corporate treasurers to hedge against Brexit risks, the British pound is one of the most undervalued currencies among its developed market peers, Jen told the Reuters Investment Outlook Summit.

“I think we’re going to see an inactive ECB for much of next year versus an active Fed,” he said, adding even if the European Central Bank were to raise interest rates, they would remain in negative territory.

Read the original article on the ‘Reuters’ website.

Bloomberg: Why a Housing Cool-Off May Leave Consumers Unperturbed This Time

As the $220 trillion global housing market starts to cool off in some places against a backdrop of monetary policy normalization, economists at Eurizon SLJ Capital offer a reason for calm. Because price declines are hitting extremely expensive cities, they might not drag down consumption the way standard theory would predict.

“Modest declines in property prices in Mumbai, Hong Kong, Shanghai, London and even New York City may not lead to a significant weakening in consumption,” write Stephen Jen, CEO of the London-based hedge fund, and economist Joana Freire. That’s good news, because they think global property prices may have peaked for the cycle, noting that they’re in decline in London, New York, Stockholm, Hong Kong and many other cities.

“Since property prices had gone too high, the incipient price correction — assuming it remains modest and gentle — may perversely lead to an increase in consumption,” they write.

Read the original article on the ‘Bloomberg’ website.