Central banks, risk metrics and value assets
Global equities have outperformed government bonds since last summer. Despite the caveats expressed in the December FOMC minutes, the Bernanke Fed and the Draghi ECB will continue to intervene in the debt markets on an epic scale, with the Bank of Japan under PM Shinzo Abe’s diktat also hugely interventionist. However, it is almost certain that we will witness periodic hits in risk assets, like the corrections we saw in 2010, 2011 and even spring 2012. The catalyst for a spasm of risk aversion?