Eurizon's Filippo Stefanini on rates expectations: Slow 'n low

Jonathan Boyd
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Eurizon's Filippo Stefanini on rates expectations: Slow 'n low

 Filippo Stefanini, head of Multimanager Investments & Unit Linked at Eurizon, has provided InvestmentEurope with his outlook on global interest rates for the next 12 months.

Q. Are you planning for/expecting interest rates to remain low in Europe, US, Japan for the next 12 months?

A. "Interest rates are at record low levels in Europe and Japan. It's emblematic in the case of the Swiss government curve that it is almost entirely in negative territory."

"Why should interest rates rise? Because of inflation and/or because of reacceleration of the economic cycle. It's hard to see a sustained path on both sides

"And even if interest rates will rise, by how much they will rise? Given the size of public and private debt that has been created after the Great Financial Crisis, any small increase in interest rate can harm materially the economic cycle.

"Even the Federal Reserve has made a U-turn after the latest hike in December 2018, and now all central banks are in an easing mood.

"So, we expect interest rates to remain low despite temporary volatility episodes."

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Filippo Stefanini recently took part in a panel discussion hosted at the InvestmentEurope Italian Summit Rome 2019, which discussed the search for 'safe' assets.

Moderated by Sky Tg24's TV news anchor Vittorio Eboli, the Summit panel session addressed some of the hottest topics for Italy's fund industry currently, ranging from the current regulatory changes on the institutional space to the challenge of finding alternatives at a time when yields on "safe assets" such as government bonds is among the foremost areas of discussion.

Taking part in the discussion were panellists Filippo Stefanini, head Multimanager Investments & Unit Linked at Eurizon Capital SGR; Stefania Luzi, head of Economics and Finance area in Mefop; Roberto Violi, senior director of the Bank of Italy's Financial Markets and Payment Systems Department; and Orazio Di Miscia, head of asset allocation and portfolio management of liquid asset classes at Poste Vita.

Panelists agreed that regulatory evolution has been recently the major driver of change to the industry. For reference, the European Commission noted in July 2018 that the then recent change in government was "likely to substantially change the pension agenda", following the May 2018 agreement between the League and the Five Stars Movement, which proposed amendments to the law that would enable all workers to retire when they accrue either 41 contribution years or 100 years as the sum of age + contribution years.

By January 2019, the Italian government announced it has approved a ‘citizens' income' and reform of the pensions scheme, which effectively reduced the pension age from 67 down to 62 (age + 38 years of contributions to meet the ‘quota 100' rule). 

What remains unknown, however, is to what extent Italy's public finances can afford the new rules.

To read more about the Summit, download a copy of the InvestmentEurope magazine: https://documents.chitra.live/api/v1/documents/5f755d4b-9626-4d7d-a312-f3b760851d1b/download 

To view video highlights of the Summit, click here: https://www.investmenteurope.net/news/4003210/video-highlights-italian-summit-rome-2019-published

 

Jonathan Boyd
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Jonathan Boyd

Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope.