Blokland’s daily sketch

Blokland’s daily sketch

27-11-2020 | Daily sketch

Massive central bank liquidity is a given for 2021

  • Jeroen Blokland
    Portfolio Manager

Central banks around the globe are expected to continue to add massive amounts of liquidity in 2021. Given that excess liquidity is positively correlated to the valuation of risky assets such as equities, central bank policy will remain a tailwind for the market. In addition, as GDP growth turns negative again in many parts of the world as a result of rising Covid-19 case numbers, some central banks, including the ECB, will increase their bond buying programs in the near future. Hence, while the focus has shifted to the timeliness and effectiveness of a Covid-19 vaccine, ongoing monetary stimulus will provide a solid backstop for risky assets going forward.

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As a senior portfolio manager I use charts to illustrate financial issues every day. I tweet my favorites as @jsblokland and was named 'one of the 50 most important people for investors to follow in 2018' by MarketWatch.
Previous editions of the daily sketch can be found on my personal financial markets blog. All graphics provided are collected from Bloomberg data and public websites. They do not always reflect my personal opinion and may also not necessarily reflect the opinion of Robeco. Please cite all references or quote the original source if replicating content.

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