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Transition - 2018 Outlook

2018 will be a key year of transition from the QE era that has dominated financial markets since the global financial crisis to more ‘normal’ post-QE monetary policies.

We are past the zenith for the ‘goldilocks’ investment regime of positive growth surprises and inflation surprising to the downside that allowed central banks to tip toe on the path to policy normalisation. In my view, 2018 is much more likely to be accompanied by upside surprises to inflation that along with another year of strong growth will accelerate the pace of transition to the post-QE monetary and investment regime. I expect that financial markets will be more volatile, asset and credit dispersion will rise, and active investors will be better placed to enhance QE-diminished beta returns with alpha from fundamental analysis of idiosyncratic risks.

BlueBay is committed to doing what it can to help our clients navigate the investment challenges they face. Hopefully this 2018 Outlook offers a modest but useful contribution in that ongoing effort.


Download article: Transition - 2018 Outlook

Market Insight

David Riley

David Riley
Partner, Head of Credit Strategy
Published 12 December 2017
Download this article here.
10 minute read

This document is issued in the United Kingdom (UK) by BlueBay Asset Management LLP (BlueBay), which is authorised and regulated by the UK Financial Conduct Authority (FCA), registered with the US Securities and Exchange Commission, the US Commodity Futures Trading Commission (CFTC) and is a member of the National Futures Association (NFA). Past performance is not indicative of future results. All data has been sourced by BlueBay. To the best of BlueBay’s knowledge and belief this document is true and accurate at the date hereof. BlueBay makes no express or implied warranties or representations with respect to the information contained in this document and hereby expressly disclaim all warranties of accuracy, completeness or fitness for a particular purpose. This document is intended for “professional clients” and “eligible counterparties” (as defined by the FCA) only and should not be relied upon by any other category of customer. Except where agreed explicitly in writing, BlueBay does not provide investment or other advice and nothing in this document constitutes any advice, nor should be interpreted as such. No BlueBay Fund will be offered, except pursuant and subject to the offering memorandum and subscription materials (the "Offering Materials"). If there is an inconsistency between this document and the Offering Materials for the BlueBay Fund, the provisions in the Offering Materials shall prevail. You should read the Offering Materials carefully before investing in any BlueBay fund. This document does not constitute an offer to sell or the solicitation of an offer to purchase any security or investment product in any jurisdiction and is for information purposes only. No part of this document may be reproduced in any manner without the prior written permission of BlueBay Asset Management LLP. Copyright 2017 © BlueBay, the investment manager, advisor and global distributor of the BlueBay Funds, is a wholly-owned subsidiary of Royal Bank of Canada and the BlueBay Funds may be considered to be related and/or connected issuers to Royal Bank of Canada and its other affiliates. ® Registered trademark of Royal Bank of Canada. RBC Global Asset Management is a trademark of Royal Bank of Canada. BlueBay Asset Management LLP, registered office 77 Grosvenor Street, London W1K 3JR, partnership registered in England and Wales number OC370085.

Published December 2017