Brexit the biggest short-term risk: BlackRock’s Thiel

LONDON (Reuters) – Talks on Britain’s withdrawal of the European Union pose the biggest short-term risk to European financial markets, BlackRock’s deputy chief investment officer for fixed income Scott Thiel said on Wednesday.

Britain is in the middle of negotiations with the European Union to try to agree the terms of a transition deal to cover the period after it leaves the bloc.

“The two positions are very far apart from each other, so I am unsure about the political fix that it will take to get us into a transition period,” Thiel said, with reference to why he sees Brexit as a big near-term risk for markets.

Thiel is also underweight on Italian bonds and said the lack of a reaction in Italy’s bond market to inconclusive elections on March 4 were a concern.

“The reality is that there has been no volatility in Italian bonds… to me that doesn’t make sense,” he told reporters.

Talking about the withdrawal of monetary stimulus by major central banks, Thiel said that he did not think the withdrawal of stimulus in the euro area would be as smooth as it has been in the United States.

One reason for that, said Thiel, was because the European Central Bank’s asset purchase scheme has been much larger than that of the U.S. Federal Reserve.

The ECB last week dropped a pledge to increase bond buys if necessary but signaled a slow route out of its 2.55 trillion- euro ($3.16 trillion) asset-purchase scheme.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.