Global Markets Update Depreciation in Mexican peso may have a bit further to run Despite the peso’s recent rebound, we suspect that an unstable political and economic outlook means that it, and Mexican financial assets more generally, will perform poorly over the next year or so. 17th September 2024 · 4 mins read
FX Markets Update RBNZ cuts could pile the pain on New Zealand dollar We now think the RBNZ will be one of the few central banks to cut rates below neutral this cycle, which would be bad news for the New Zealand dollar. In view of the wider interest this FX Markets... 13th September 2024 · 4 mins read
Asset Allocation Update The long arm of the PBOC and prospects for China’s bonds Even though the PBOC is trying to prop up local government bond yields while the Fed is gearing up to cut rates, we think bonds in China will fare a bit better than those in the US. 6th September 2024 · 5 mins read
Global Economics Update Risks to the global economy: your questions answered We held online Drop-In sessions earlier this week to discuss the outlook for major DM and EM economies and the risks that they face as we look forward to 2025. (See a recording here.) This Update... 5th September 2024 · 8 mins read
FX Markets Update We think Asian currencies’ rallies will slow, not stop We expect most Asian currencies to make further gains against the US dollar over time, even if their biggest rallies may now be behind them. 27th August 2024 · 5 mins read
FX Markets Update The outlook for the US dollar as Fed cuts approach With the Fed set to finally start loosening policy and a soft landing still looking like the most probable outcome for the US economy, we think unfavourable rate differentials and continued robust... 21st August 2024 · 4 mins read
Asset Allocation Update Gilt yields and sterling may have further to fall While expectations for interest rates in the UK have already fallen by 40bp by end-2025 since mid-July, our projections for UK CPI inflation to remain below the 2% target for much of 2025 and 2026... 15th August 2024 · 3 mins read
Global Markets Update What to make of the market summer squall Conditions have stabilised after a turbulent few weeks in financial markets, and we expect the rebound in equity markets over the past week or so to continue. Our assessment is that the market fallout... 15th August 2024 · 5 mins read
FX Markets Update What to make of the latest moves in EM currencies Heightened US recession worries have helped unwound some of the stretched positions in high-carry EM currencies, resulting in their exchange rates moving closer to their “fair values” (judging by our... 9th August 2024 · 4 mins read
Japan Economics Update FX intervention to weaken yen unlikely Japan’s government has intervened in the FX markets to weaken the yen far more often than to strengthen it. But FX interventions have become very rare over the past two decades and our sense is that... 6th August 2024 · 4 mins read
FX Markets Update Inflation a bigger deal than carry trade for AUD & NZD We think the yen’s rally will continue, but suspect that won’t stop the Australian and New Zealand dollars – alleged victims of the carry trade’s unwind – from making some ground over the next year or... 31st July 2024 · 4 mins read
FX Markets Update Sterling still likely to weaken later this year While the pound has outperformed all major G10 currencies so far this year, we still expect it to depreciate against the greenback later in the year as the Bank of England eases monetary policy more... 24th July 2024 · 3 mins read
FX Markets Update Yen intervention: fourth time’s the charm? Japan’s intervention in support of the yen is not enough in itself to generate a sustained rebound in the yen. But with the FOMC (finally) nearing its first rate cut while the BoJ continues to tighten... 17th July 2024 · 4 mins read
FX Markets Update Revisiting the outlook for the renminbi & the yen The continued weakness of the renminbi and the yen against the US dollar despite the narrowing of interest rate differentials via-a-vis the US is something of a conundrum, but our sense remains that... 11th July 2024 · 5 mins read
Europe Economics Update What next for France? The results of France’s parliamentary elections mean it should avoid the large, unfunded fiscal expansion that two of the three major political groups were advocating. But it also means France is very... 8th July 2024 · 9 mins read
FX Markets Update Assessing French election risk for the euro The upcoming French election continues to loom over euro-zone financial markets and the euro. We think it would take a worst case scenario in which France’s fiscal outlook worsens materially to... 27th June 2024 · 4 mins read