- Global recession fears deepen
- ECB signal further easing, dovish Fed hold rates and BoJ adopt negative rates
- Emerging markets enjoyed a risk-on rally at the end of the month
- Rotated out of Asian outperformers into defensive government bonds
Markets started the year in the same vain they had left off in 2015. As concerns over recessionary fears deepened; market sentiment was extremely fragile. US and China data did little to support markets and the risk-off tone saw a further plunge in the commodity space, with other markets following suit. That was until Mario Draghi’s signal of further ECB easing and the Fed’s rate hold, rounded off nicely with the BoJ’s surprise negative interest rate announcement. Markets reacted positively to the central bank policy decisions and emerging market bonds enjoyed the risk-on rally into month-end.