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Asset Class Reports
Canterbury Review: First Quarter 2015

Global interest rates continue to fall as the ECB implements QE

  • Steady U.S. growth and a lack of foreign exchange exposure contributed to a second consecutive quarter of small cap stocks outperforming large cap stocks. Non-U.S. stocks outperformed U.S. stocks as foreign exports and earning projections rose as a result of monetary easing in Europe and Japan. As a potential precursor to higher volatility, the Dow Jones Industrial Average experienced more one percent daily moves during the quarter than during the first three quarters of 2014 combined (albeit, without a single move in excess of two percent).
  • U.S. and global interest rates continued to trend lower, especially in the Eurozone. In January, the ECB announced their own Quantitative Easing program in order to combat deflation and spur economic growth. In the U.S., the FOMC dropped its pledge to remain ‘patient’ with potential rate increases. However, Fed policy makers signaled that they won’t rush to raise interest rates with low current inflation and stagnant wage growth.
  • Low inflation sentiment persisted during the quarter as commodities and natural resource equities continued to decline. Oil prices remained relatively flat as the market assessed future supply and capital expenditures within the sector.


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