By: Neels Heyneke, Senior Strategist and Mehul Daya, Strategy: Research Analyst at Nedbank Corporate and Investment Banking
Our long-term view remains that the investment landscape will remain challenging in this ‘Post-Debt Super-Cycle’ world and we believe that the drivers of the markets will be more difficult to identify (2016 was proof of that). We remain long-term dollar bulls because we believe the system has lost its ability to create dollars without the debt creation provided by the shadow banking system. Last year also recorded the secular low in long bond rates – this was reflected in the shortage of money in the system gaining prominence over the deflationary fears. Hence, we have become long-term bond bears.