02/02/2012 Author: David Beattie (London)

European debt crisis development among key 2012 economic themes: Credit Suisse

The further development of the European debt crisis and macroeconomic trends in the US and Eurozone are among the key factors that will drive global markets this year, according to Credit Suisse’s global CIO for asset management and private banking, Stefan Keitel.

In a report released Thursday by the bank, Keitel says he believes that equity markets are “further trending in a positive direction due to improved global macroeconomic conditions, stabilising policy measures, and the ECB’s strong liquidity support for Eurozone banks”

Continuing, he said: “Given the current environment characterised by low-yielding bond markets, and volatile yet upward shifting equity markets, investors may need to look for alternative strategies that offer uncorrelated returns and attractive risk/return profiles."

On hedge funds, he said that market volatility has hurt short-term performances in the event-driven space, but that managers expect that there will be an increased supply of quality, long-term opportunities this year.

Global macro hedge funds performed well last year, he added, pinpointing those managers with a tactical, non-linear approach as having benefited from the short-term, stress-related trading opportunities in the equity, commodity, and bond markets worldwide.