US, UK and Europe unlikely to raise rates until well into 2011

ON ASSET ALLOCATION

JOHN BEARMAN, CIO at Santander Asset Management on Asset Allocation

Recent market activity has been dominated by the risk on/risk off trade. We have seen signs of a slowing global economy, but recent data releases on the US manufacturing ISM surprised on the upside and remains strong. Private non-farm payrolls also surprised positively in August, rising by 67,000. Investors have been faced with conflicting messages of slowing global growth and positive earnings surprises at the company level. With interest rates at low levels, we may see a further loosening in monetary policy with the re-introduction of QE programmes. Central Banks in the UK, US and E...