Global Markets Update Market implications of the outlook for ECB policy We remain more dovish than investors about the outlook for interest rates in the euro-zone. But we still think that “risky” assets there will perform badly this year, as slowing global growth takes... 8th March 2019 · 1 min read
Global Markets Update The implications of a comprehensive US-China deal We have argued before that a limited US-China trade agreement ruling out further tariffs now appears largely priced in to markets. But the chances of a more comprehensive deal, including the roll-back... 7th March 2019 · 1 min read
Global Markets Update Will smaller EM Asian markets keep underperforming? Smaller stock markets in EM Asia have missed out on most of the big rally in global equities since around the turn of the year. But the characteristics that explain their relative weakness so far in... 5th March 2019 · 1 min read
Global Markets Update Not all bonds are likely to come unstuck We don’t think that increases in government bond yields in the US and Germany over the past week will continue throughout 2019. By contrast, we suspect that the rise in the UK is a sign of things to... 5th March 2019 · 1 min read
Global Markets Update New, lower, end-2019 forecast for 10yr Treasury yield We have lowered our end-2019 forecast for the 10-year US Treasury yield by 25bp, to 2.25%. This reflects the fact that we no longer expect the FOMC to raise its target for the federal funds rate this... 1st March 2019 · 1 min read
Global Markets Update Swedish krona unlikely to recover much lost ground Although the Swedish krona rose following stronger-than-expected GDP data on Thursday, we doubt that it will rebound much, as we are more dovish than investors about the outlook for monetary policy. 28th February 2019 · 1 min read
Global Markets Update A lot of good news on trade is now discounted Although there is no one definitive measure, most evidence suggests that as much as half of last year’s hit to global markets from worries about a US-China trade war has now unwound. Given the type of... 27th February 2019 · 1 min read
Global Markets Update Conditions not conducive to a “profitless” S&P 500 rally The S&P 500 has rebounded by more than 11% so far this year in response to a shift in Fed policy and a thawing of the US/China trade war. Nonetheless, a further rally is unlikely given the darkening... 27th February 2019 · 1 min read
Global Markets Update BTPs to underperform other peripheral bonds We think that safe-haven flows will keep government bond yields across the euro-zone’s “core” low this year. And, we wouldn’t be surprised if yields in Germany even turned negative as they did in 2016... 21st February 2019 · 1 min read
Global Markets Update Why we’re sticking to our guns on EM equities EM equities’ flying start to the year has continued this week, but we are sticking to our view that they will fall over 2019 as a whole, as the darkening outlook for the global economy takes its toll... 20th February 2019 · 1 min read
Global Markets Update ECB and SNB unlikely to put a floor under bond yields We doubt that German and Swiss government bond yields will drop much further. But if they do fall deep into negative territory, there probably won’t be much that the ECB or the SNB will be willing or... 13th February 2019 · 1 min read
Global Markets Update Where to weather another storm in EM equities We think that the recent rebound in emerging market (EM) equities will prove temporary, as concerns about global growth intensify. We expect the healthcare and consumer staple sectors to be more... 11th February 2019 · 1 min read
Global Markets Update Safe-haven flows to support the Swiss franc this year While the Swiss franc has not benefitted much from recent upheaval in markets, including yesterday’s sell-off in US equities, it has been very stable. We expect this to remain the case in 2019, as... 8th February 2019 · 1 min read
Global Markets Update Less QT wouldn’t save the US stock market Although the S&P 500 has risen further since the FOMC’s latest meeting, we still expect the index to falter this year even if the Fed shrinks its stock of assets more slowly and by less than... 7th February 2019 · 1 min read
Global Markets Update Rally in EM local currency bonds likely to fizzle out This week’s flurry of EM central bank meetings will probably add to the signs that the shift towards tighter monetary policy in much of the emerging world is nearing an end. Even so, we doubt that the... 5th February 2019 · 1 min read
Global Markets Update A dovish Fed won’t keep the US$ down if the S&P falls Although we expect the US federal funds rate to end 2020 lower than it is now, we don’t think that the dollar will decline this year. The reason is our bearish view of the global economy. 31st January 2019 · 1 min read
