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Komfie Manalo, Opalesque Asia:

The financial markets remain calm as if oblivious of the political uncertainties shaping the world currently, says Jeanne Asseaf-Bitton, global head of cross asset research at Lyxor Asset Management, a European-based asset management specialist.

In its latest investment focus, Lyxor AM said that it believes monetary support continued to play a key role for the markets' behavior.

"Since the Brexit vote, most equity markets staged double-digit gains, implied Cross Asset Volatility dropped towards its historical lows and typical safe-havens lost ground," Asseaf-Bitton said. She added, "Major central banks lean on the dovish side. In addition, the macro news flow has improved, suggesting that a global recovery is underway. This is especially true in the Eurozone where the reflation process appears to make progress."

She also cited the March PMI surveys which showed their highest since the great financial crisis, pointing to close to 3% growth. Labor conditions kept mending, together with confidence. Noteworthy, consensus estimates for Eurozone growth in 2017 were continuously revised up since last summer.

According to Asseaf-Bitton, while progress seems clear on activity, Lyxor does not see evidence that inflation is gearing up yet. Inflation expectations (as measured by breakevens) eased back to 1.6%. Oil base effects are waning and wage growth is still in a downtrend. To be sure, ......................

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