Global Markets Update Rising corporate credit spreads not just an oil story The recent pick-up in US corporate credit spreads is more than just a response to the slump in oil prices over the past couple of months. We think that it also reflects worries about the outlook for... 26th November 2018 · 1 min read
Global Markets Update What the S&P’s slump tells us about the US economy While the 10% drop in the S&P 500 since early October can be partly blamed on plunging oil prices and concerns about global demand, it also seems to reflect justified fears about the US economic... 26th November 2018 · 1 min read
Global Markets Update No deal Brexit would be a mixed bag for UK assets We think that the performance of UK financial assets would be varied in the event of a no deal Brexit, which has become increasing likely given the recent political chaos in Westminster. 22nd November 2018 · 1 min read
Global Markets Update Italy’s now-junk credit spread will probably get bigger Italian government bonds are now trading like “junk”, but we think that the spread between the yields of 10-year BTPs and German Bunds will increase even more in 2019 as Italy’s problems escalate and... 20th November 2018 · 1 min read
Global Markets Update Three reasons why QT won’t drive UST yields up much A reassessment of the prospects for interest rates will probably play a far bigger role than the Fed’s quantitative tightening (QT) in influencing Treasuries next year. Indeed, we expect the 10-year... 15th November 2018 · 1 min read
Global Markets Update Autos likely to remain a drag on euro-zone equities We think that equities in the euro-zone will be caught in the crossfire of a stock market sell-off in the US next year, as the economy there slows. Our forecast is for the S&P 500 to fall by 14% in... 15th November 2018 · 1 min read
Global Markets Update More trouble ahead for Japan’s stock market We expect the stock market in Japan to come under more fire in 2019, as equity prices tumble in the US; the yen strengthens; and the Trump administration continues to exert pressure on China. Our... 12th November 2018 · 1 min read
Global Markets Update Swiss stock market likely to fall less than most next year We think that the global economy will slow in 2019 and take a toll on equities generally. If history is any guide, Swiss stocks will not be spared. But two factors suggest that they will hold up... 9th November 2018 · 1 min read
Global Markets Update What to make of the big rise in TIPS yields The big rise in the real yields of US Treasury Inflation Protected Securities (TIPS) over the past year or so is a logical response to tighter Fed policy than investors were expecting. But it is... 7th November 2018 · 1 min read
Global Markets Update US midterms unlikely to trigger a big market reaction We don’t expect today’s midterm elections in the US to have a major bearing on its stock market, even if the Republicans retain both chambers of Congress or the Democrats do very well. 6th November 2018 · 1 min read
Global Markets Update Italy’s problems shouldn’t stop euro’s revival in 2019 Although Italy’s problems are likely to continue to weigh on the euro next year, we still think that the currency will strengthen against the dollar in response to a favourable shift in monetary... 2nd November 2018 · 1 min read
Global Markets Update Last month’s rebound in the US dollar is unlikely to last Although some of things that triggered a rebound in the US dollar in October are likely to continue to underpin the currency in 2019, we still think that it will weaken then as the Fed stops raising... 1st November 2018 · 1 min read
Global Markets Update Will low valuations cause EM equities to outperform? Although the valuations of emerging market (EM) equities have tumbled compared to those of their developed market (DM) peers, we are not convinced that they will deliver much higher returns over the... 31st October 2018 · 1 min read
Global Markets Update US equities and the economy: squaring the circle While this month’s slump in the US stock market can’t be blamed on bad economic news, it can be attributed – at least in part – to concerns about the prospects for economic growth. We think that these... 30th October 2018 · 1 min read
Global Markets Update Bond markets less vulnerable to contagion from Italy Although we expect Italian bonds to remain under pressure over the coming years as the country’s fiscal and economic outlook continues to deteriorate, we think that European bond markets are generally... 25th October 2018 · 1 min read
Global Markets Update Sterling withstands fears of no deal Brexit Although October’s EU summit has come and gone without a Brexit deal in place, implied probabilities of a “no deal” do not seem to have increased very much, which is reflected in the resilience of... 24th October 2018 · 1 min read
