The AIC from the Inside

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Gregory Marks's picture

It is without a doubt that with those in attendance managing an estimated $17 trillion dollars, what is said and discussed at the annual Credit Suisse Asia Pacific Conference matters for global markets, sentiment and cross border flows. If pure capacity of the various attendees is not already impressive, the extensive list of speakers and moderators include top Credit Suisse strategists, directors of various organizations such as the WHO and IMF as well as former prime ministers. 

Seeing as my topic for the 2014 Project Firefly Emerging Leaders competition was in regards to the Fed’s ‘tapering’ of its third asset purchase program, my interest has been mainly in those former and current central bank speakers and attendees. The remarks by many have been candid and I had the opportunity to speak with and ask questions to a former RBI governor as well as the relatively controversial, former European Central Bank executive member Dr. Jürgen Stark. My particular question to Dr. Stark, which he answered straightforwardly as I expected, was in regards to the recent onslaught of European government bond issuance in 2014. Thus far we have seen some European countries already go through 50% of their 2014 issuances and we are only in March! Dr. Stark was on board with my perception that these nations could be front-running risks later in 2014 with current and attractive rates.

By far the theme of the conference is cautious bullishness in the West while Asia may have a tough few months ahead. Mirroring my own opinions in regards to Chinese and Japanese growth, many in attendance are worried. The consensus on China is that there are tremendous risks in 2014 and in my discussion with one of Credit Suisse’s strategists, we both agreed on the fact that if we see RMB truly rocket above 6.25 or we see nominal rates rise above real GDP, the risks could be unleashed quickly. 

One of the more insightful and enjoyable panels was Tuesday’s Asian private equity discussion. The men chosen to attend the conference were pragmatic in their approach to markets and blunt in their honesty. Considering myself a macro person, the insight into individual countries and the various valuations in the Asia Pacific region helped broaden my knowledge base on a geographical area that I am little exposed to in New York. With Wednesday marking the half way point here at CSAIC, I am looking forward to asking the head of the Reserve Bank of Australia (Mr. Glenn Stevens) as to his rate expectations post-Australian rebalancing and whether he sees rates in Australia returning to pre-crisis levels.