Interest rates put managers on defensive

Rising interest rates remain the biggest threat to the global equity markets. There is a fear an increase in interest rates across the global economies could cause investors to withdraw money from the market so, as a result, managers have been moving towards defensive positions. According to Tony Dolphin, director of economics and strategy at Henderson Global Investors, the two drivers in the global financial markets are fear of liquidity withdrawal and rising risk aversion. Dolphin says: "Fear of liquidity withdrawal is mainly tied up with fear of rising US interest rates. The labour...