The beginning of the capital year begins the way it ended. What can we expect in 2018?
In 2018, I expect investors to accept the facts and events in a way that corresponds to the cycle we are in. We’re entering the euphoria phase, and the proverb says the last mile is the sweetest.
It is very important to note that 2017 was the year of calming markets globally. It started for investors with concerns about Trump’s new administration, the return of protectionism and with growing global tensions. There was strong euroscepticism on the eve of elections in France, questions as to whether a vague coalition in Germany would affect the local economy, provocations by North Korea, and on top of that, a coming Brexit. Against this background, market participants had to anticipate the actions of central banks whose policies in the last decades have driven the markets.
Still, after so many unprecedented liquidity infusion measures, the question remains, where is inflation?
It found its quantitative dimension in the consumer basket, the prices of financially marketable assets. Reverse buybacks, dividend policies of companies and financial engineering are the result of this policy of central bankers. And not only that, with their actions they are conducting the economic cycle at the moment.
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