Global Markets Update Risk premia on Latin American assets may rise further Latin American assets have generally underperformed those elsewhere of late, in part driven by rising risk premia on the region’s assets. We think these risk premia may rise further over the coming... 21st June 2024 · 4 mins read
Global Markets Update Parsing the market’s verdict on recent EM elections Elections in South Africa, India, and Mexico have generated sizeable reactions in their financial markets over the past week or so, highlighting the potential for electoral surprises to generate short... 7th June 2024 · 6 mins read
FX Markets Update Zloty’s appreciation may come to a halt Having lagged behind other emerging market (EM) currencies for most of the post-pandemic period, the Polish zloty has lead the pack over the past six months. While we think that most of this rally has... 3rd June 2024 · 4 mins read
FX Markets Update AUD & NZD to outperform other G10 currencies We think the kiwi and the aussie strength will continue over the next couple of years as we expect they will be among the last developed economies to start an easing cycle. 24th May 2024 · 4 mins read
FX Markets Update Examining the divergence between EM credit spreads and FX For much of the past year, the dollar has strengthened against emerging market (EM) currencies even as EM sovereign dollar bond spreads have narrowed. One way or another, that is unlikely to last. 16th May 2024 · 4 mins read
FX Markets Update Rand strength likely to reverse course soon Despite the rand’s recent outperformance, we think risks around the upcoming election in South Africa, among other factors, will cause renewed weakness in the currency before long. In view of wider... 15th May 2024 · 3 mins read
Global Economics Update What the latest US tariffs mean for the global economy We held an online Drop-In session today to discuss the Biden administration’s new tariffs on goods from China. This Update answers several of the questions that we received about the direct effects of... 15th May 2024 · 6 mins read
FX Markets Update Slower easing cycle may not provide relief for the real Although the monetary easing cycle in Brazil is entering a much slower phase, we think the Brazilian real will remain under pressure against the dollar over the coming quarters. In view of wider... 9th May 2024 · 3 mins read
Global Markets Update Another look at risk premia; four key areas of uncertainty Despite the correction in equity markets over the past month, risk premia generally remain low across financial markets. While we expect this to continue as an AI-driven bubble inflates in equity... 3rd May 2024 · 5 mins read
China Economics Update Will China devalue the renminbi? Chinese policymakers won’t risk reliving the turmoil of 2015 by engineering a sudden devaluation of the renminbi. They may allow the currency to weaken gradually over the coming years to help industry... 1st May 2024 · 4 mins read
FX Markets Update Weakness in the Mexican peso may have further to go We think that the recent weakness in the Mexican peso was partly a symptom of stretched positioning. Given that risk premia still appear unusually low and the outlook for the “carry trade” is... 30th April 2024 · 5 mins read
Capital Daily What to make of the latest swings in the yen Japan’s apparent intervention in support of the beleaguered yen may buy some time for the currency to stabilise, but is unlikely to lead to sustained turnaround until US interest rate expectations... 29th April 2024 · 4 mins read
FX Markets Update It would take a lot more dollar strength to “break the economy” The US dollar would have to appreciate a lot further before having significant effects on the global economy and financial system. A key risk to watch for is the widening policy divergence between the... 25th April 2024 · 6 mins read
FX Markets Update The worst may be over for the Chilean peso We think the headwinds driving the depreciation of the Chilean peso against the US dollar have largely run their course. We expect the Chilean peso to recover some ground by the end of the year. 18th April 2024 · 4 mins read
FX Markets Update Reassessing our forecast for the US dollar Continued resilience in the US economy looks set to delay the Fed easing cycle until (at least) the second half of this year, so we now think the greenback will stay strong against most currencies... 16th April 2024 · 3 mins read
FX Markets Update Assessing the scope for further euro weakness The euro has fallen sharply against the greenback this week, and we wouldn’t be surprised if it weakens a bit further in the short term. That said, we think a fall below parity in the EUR/USD rate is... 11th April 2024 · 4 mins read