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    Teis Knuthsen: Stock market more promising

    Saxo Private Bank's CIO: It seems quite likely spring months will bring a correction, but long-term prospects remain good

    Baku.1 Aprel.REPORT.AZ/ The global stock markets, including Europe protects the long-term growth prospects.

    Report was told by the Saxo Private Bank'sCIO Teis Knuthsen. The reason for that is low interest rates, low inflation, low energy prices and plenty of spare capacity. According to Teis Knuthsen it is quite likely that within a few months European stock exchanges will experience a short-term correction of 5 to 10%, but it will come only as a temporary interruption to long-term growth.

    Central banks are fighting windmills not only when they fear deflation, but also when they believe that rate cuts and quantitative easing are weapons to deal with supply-side issues.

    The European Central Bank is now buying bonds now worth EUR 60 billion every month (of which 44 bln are government bonds). It is really too much of a good thing relative to net issuance, and I wouldn’t be surprised to see an early tapering of the program towards the end of this year, says T. Knuthsen. The spring months will bring a correction, but the long-term prospects remain good, he added.

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