Global Markets Update Co-movement of equities and bonds unlikely to last While the real returns from a wide variety of assets were positive in the first half of this year, we don’t expect the good news to last. We project that those from US equities and government bonds... 3rd July 2019 · 3 mins read
Global Markets Update BoJ policy stance may put upward pressure on the yen We have long forecast the yen to strengthen to ¥105/$ by the end of 2019, primarily based on our expectation that a sell-off in global equities would boost the demand for safe havens. While we remain... 28th June 2019 · 3 mins read
Global Markets Update Fed easing and US equities: lessons from history While the performance of the US stock market in the Fed’s last four easing cycles was varied, our view remains that it will fall in the next one, which we expect to span from late-summer 2019 to... 27th June 2019 · 3 mins read
Global Markets Update We don’t think that Fed easing will boost Treasuries Although we expect the FOMC to loosen policy substantially by the spring of 2020, we are not forecasting a renewed decline in the 10-year Treasury yield to below 2%. This is because we think that the... 21st June 2019 · 1 min read
Global Markets Update Investors’ trade war focus risks missing bigger picture Investors seem as pessimistic about the US-China trade war now as they have ever been. Indeed, it would probably come as little surprise to markets if the two sides imposed tariffs on virtually all... 13th June 2019 · 1 min read
Global Markets Update Donald Trump, not the Fed, to blame for a strong dollar Donald Trump’s assertion on Twitter yesterday that a “way too high” Fed interest rate was responsible for a “devalued” euro and other currencies against the dollar is wrong, at least when it comes to... 12th June 2019 · 1 min read
Global Markets Update Recent setback for the US dollar likely to be temporary Although the US dollar has pulled back over the past fortnight, we expect it to strengthen once more against most major currencies in the second half of this year as the global economy slows. 11th June 2019 · 1 min read
Global Markets Update US corporate credit spreads likely to rise much further We think that corporate credit spreads in the US will continue to climb this year, as the economy there slows. Our forecast is for the spreads of speculative-grade bonds to rise by well over 100bp, on... 4th June 2019 · 1 min read
Global Markets Update Italy may soon be considered riskier than Greece The spread between the yields of 10-year government bonds in Greece and Italy has fallen sharply following the latest European Parliament elections. We now forecast that it will turn negative... 31st May 2019 · 1 min read
Global Markets Update Processing the mixed signals from US stocks and bonds While it may appear as if the US stock and bond markets are sending mixed signals about the health of the economy, it is common for equity prices to remain high while Treasuries rally in anticipation... 29th May 2019 · 1 min read
Global Markets Update EM currencies vulnerable to renminbi depreciation The relationship between the renminbi and other emerging market currencies has strengthened in recent years. While the response to renewed US-China tensions has been limited so far, if the renminbi... 29th May 2019 · 1 min read
Global Markets Update Bleak outlook for Japanese equities Equities in Japan have underperformed those in other major developed markets since the start of 2018, owing to a stronger yen and weaker corporate earnings in particular. We expect this... 29th May 2019 · 1 min read
Global Markets Update EM sovereign dollar bonds not all in the same boat We think that EM sovereign dollar bonds will generally fare badly in 2019. But their correlations with US equities and Treasuries suggest that they will hold up better in parts of Asia and Latin... 24th May 2019 · 1 min read
Global Markets Update Relentless outperformance of US equities likely to end The far superior performance of equities in the US than in the rest of the developed world since the global financial crisis (GFC) can be mostly attributed to healthier growth in corporate earnings... 24th May 2019 · 1 min read
Global Markets Update Divergence in E-Z peripheral bonds likely to continue The yield of 10-year government bonds in Italy has moved in the opposite direction to the yields of 10-year government bonds in Spain and Portugal recently. While we don’t expect that to continue, we... 23rd May 2019 · 1 min read
Global Markets Update Populists unlikely to rattle markets at EU elections We suspect that the European Parliament (EP) elections will not cause much reaction on bond markets, even if populist parties perform even better than expected. Recent elections in the EU suggest that... 20th May 2019 · 1 min read
