Independent Strategy

NIRP – RIP capitalism?

As central bankers push on through the looking glass with NIRP, markets will have to pay closer attention to the laws of unintended consequences. We know that in this dimension the behaviour of banks, depositors and borrowers will shift. But we don’t know exactly when they will and by how much. With the ECB set to push on further towards the Mad Hatter on Thursday we remain short euro versus the US dollar, although the main driver of a weaker euro may well prove to be the Fed next week if the ECB disappoints. The backdrop remains hostile for risk assets more broadly.

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