Asset Allocation for September 2017

Equities reacted substantially on new missile launches from North Korea. But remained high on achieved levels.

Volatility hike in the middle of August caused money outflows from equity funds to gold and bonds instruments. So that Japanese 10Y bonds yield has dropped into negative territory for the first time since 2016 and the gold price raised by 5%.

Aside from that markets were summer-like monotonous. It’s seemed like investors payed more attention to bitcoin and ICO’s whether made trade decision on the markets.

In September it is time for difficult geopolitical solutions. Europe, China and USA are to sit down for discussions (in United Nations or other format) to solve Korean crisis problem. It is clear that economic sanctions against North Korea don’t make sense for Kim Jong-un. With every new missile launch the war danger appears closer. Such situation will hang over stocks.

Threat and challenges in world markets:
- Monetary policy tightening by US FED
- Growing tensions between USA, South Korea, Japan and North Korea

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