In my opinion, one major change that we are seeing from the Fed with Yellen's appointment is the fact that they are no longer going to carry the burden of the U.S. economy on their shoulders.
In the recent Bank of England's press conference officials announced quite strong economic forecasts for 2014, as they are looking for growth to accelerate to more than 3% this year.
The Chinese state banks are politically aligned with the state owned enterprises and a lot of these are inefficient and struggling; but they are still funding them.
Currently we do not have a really good Ruble story. One of the most important factors behind this is the global sell-off story.
The GDP figure of 7.7% is the main national average and everyone is very keen on quoting that, but in reality it means very little.
From our point of view, the recent Ruble depreciation was mostly driven by both local and foreign factors.
Two SSA countries (excluding South Africa) have large foreign holdings in their markets: Nigeria and Ghana.
In our opinion, China needs stable growth and authorities are committed to support the economy by introducing reforms.
If U.S. oil was more freely available in the global market, this would help to depress international benchmark prices as well as the prices of local U.S. blends.
Once the policy makers indicate that there is economic slowdown from the sales tax hike, we see the Bank of Japan embarking on further easing, most probably towards June of the year of 2014.
I do not believe that gold will lose much of its allure. It will still have investors attracted to it despite the fact that it offers no yield.
In our opinion, Canadian growth will slightly behind the U.S. We are expecting about 2.5% expansion in Canada this year.
The Indian markets have taken QE tapering announcements in its stride and will not see much impact as it actually commences.
Actually, we do not expect major changes in the Fed's policy, in the sense that the current tapering of asset purchases will continue through the rest of the year. We definitely do not anticipate any rate hikes this year.
The main cause lies in the process of structural adjustment and the fact that the liquidity that the ECB has been pumping in the economy was only into the banking sector.
I do not think there will be any interest rate hikes until the year after.
In general, I think that the U.S. economy is much more surefooted than Europe at the moment and that should leave the Euro slightly weaker throughout the coming year.
In our view, the current level is definitely unsustainable.
Over the last few weeks Switzerland's macroeconomic data have been surprising on the upside.
How would you describe the overall performance of the Yen against its major counterparts?V.S.: The Japanese Yen appears to be the weakest G-10 currency this year. If we look at the shorter term, for example, the past month, it weakened substantially as well. Obviously, Japan's currency has been a significant underperformer in 2013. V.M.: The Yen has been among the key
In the past couple of weeks we have witnessed Euro's strength across the board.
We believe in some respect the data understated the UK's growth potential at the beginning of the year at the time our European economists were already pinpointing that there were signs of recovery.
Sadly, in the post great recession world not only is too-big-to-fail alive and well, it is likely a far greater problem than it has ever been.
There are some signs that confidence in financial markets is being restored.