Safe-haven assets seen as traditional hedges aren’t panning out as they once did – JP Morgan

Anil Panchal FXStreet

In its latest analysis, conveyed by Bloomberg, JPMorgan Chase & Co. highlight risks to the traditional safe-havens, like gold and Japanese Yen, due to the easy-money policies of most central banks.

John Normand from the bank said, “Defensive assets are delivering their weakest performance and therefore worst hedge protection of any equity sell-off in at least a decade,” he said. “The wall of cash some hypothesize will inevitably flow into equity, credit and EM may remain very high indefinitely.”

The bank also mentioned, “a portfolio of hedges like the yen versus all currencies, the dollar against emerging-market currencies and gold versus the greenback is still worth holding as these have delivered gains in 60% to 80% of major stock-market downturns.”

Read: Gold Price Analysis: XAU/USD bulls catch a breather below $1,900

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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