- Advertisement -
- Advertisement -

Related

Moma Advisors See Divided ECB as Posing Difficulties to Future QE

Report: Alternative Fixed Income

- Advertisement -

Stockholm (HedgeNordic) – Daniel Pedersen (pictured), the CIO of Danish asset manager Moma Advisors, puts a serious question mark around the number of dissenters opposing a restart of quantitative easing following the ECB rate decision on Thursday.

“We think the (interest rate and QE) decision was basically in line with expectations. And expectations were quite high due to the comments by Olli Rehn a few weeks ago. The move by ECB is relatively aggressive. But what was not expected, in our opinion, was the significant amount of dissenters within ECB”, he says continuing:

“French, German and Dutch ECB Governors were all skeptical of this ECB QE resumption. And also the Austrian and Estonian Governors were dissenters. This makes it very difficult for Christine Lagarde to succeed Mario Draghi on November 1st 2019. If there were really this significant opposition to the ECB decision to relaunch QE, what is she going to do after November 1st? End the QE program that was just relaunched? Or continue with debt monetization with the support of Italy and Spain but with opposition from several large economies including Germany and France?”

Pedersen says that they have reduced risk in Europe a bit post ECB and suggest that every portfolio manager takes a good look at their respective portfolios while thinking about the fact that the central bankers at the core of the eurozone economies were opposed to the restart of QE.

“There are  some other concerns here. Credit spreads in the Eurozone have come in significantly. We have reduced our risk in Europe today, post ECB. It is not clear that ECB will continue this QE program and it is also creating tensions towards US due to the very low EURUSD fx rate now at around 1.10.”

“The reaction of the EURUSD post ECB was also interesting. It dropped initially but it then went higher a few hours later when it became clear that this decision to relaunch QE was based on a narrow majority. France also opposed the ECB QE resumption. In our opinion, this is interesting. How is Christine Lagarde going to handle this internally divided ECB going forward?”, Pedersen wonders.

Subscribe to HedgeBrev, HedgeNordic’s weekly newsletter, and never miss the latest news!

Our newsletter is sent once a week, every Friday.

Jonathan Furelid
Jonathan Furelid
Jonathan Furelid is editor and hedge fund analyst at HedgeNordic. Having a background allocating institutional portfolios of systematic strategies at CTA-specialist RPM Risk & Portfolio Management, Mr. Furelid’s focus areas include sytematic macro and CTAs. Jonathan can be reached at: jonathan@hedgenordic.com

Latest Articles

Atlant Fonder Expands Credit Expertise

Hedge fund boutique Atlant Fonder has strengthened its portfolio management team with the appointment of Carl Johan Lagercrantz as a fixed-income portfolio manager. Lagercrantz...

Danske Bank AM Expands Quant Offering

Stockholm (HedgeNordic) – Danske Bank Asset Management’s Quant & Overlay team, known for managing several quant-focused hedge funds, has announced the launch of a...

Laura Wickström Refines Diversification Strategy at Veritas

In late 2024, Laura Wickström concluded her first annual planning cycle as Chief Investment Officer at Veritas Pension Insurance Company, which shaped the investment...

Main Drivers of CTA Performance in 2024

The CTA universe is dominated by diversified systematic trend following managers exploiting Time Series Momentum (TSMOM). In other words, most CTAs are trend followers...

LGT CP Appoints Ingrid Albinsson to Advisory Board

Stockholm (HedgeNordic) – LGT Capital Partners, a global specialist in alternative investing, has announced the appointment of Ingrid Albinsson, the former Deputy CEO and...

Case Credit Opportunity Casts a Wide Net

Stockholm (HedgeNordic) – Case Credit Opportunity, an opportunistic alternative fixed-income fund originally established under Catella Fonder, achieved its strongest annual performance in 2024 since...

Allocator Interviews

In-Depth: Megatrends

Voices

Request for Proposal

- Advertisement -