Global Markets Update Will the hunt for yield soon be over? We think that the hunt for yield will end soon, as the available return on US Treasuries rises in response to tighter Fed policy than investors are anticipating. This probably wouldn’t result in the... 12th May 2017 · 1 min read
Global Markets Update How would markets react to a Macron victory? Investors breathed a sigh of relief after Emmanuel Macron claimed the largest share of the vote in the first round of the French presidential election, and there is scope for a further rally if, as... 5th May 2017 · 1 min read
Global Markets Update Trump’s tax tweaks don’t alter our cautious view of US equities President Trump’s latest proposal for tax reform does not provide us with a reason to alter our forecast that the S&P 500 will end this year lower than it is now, as margins are squeezed by rising... 27th April 2017 · 1 min read
Global Markets Update After “taper tantrum”, is “reinvestment rage” next? The US Treasury market has shrugged off the news in the latest FOMC minutes that the Committee may begin to alter its reinvestment policy later this year. Nonetheless, we still expect a reduction in... 6th April 2017 · 1 min read
Global Markets Update New forecasts for bonds and currencies We have revised some of our forecasts for developed market government bonds and exchange rates to take account of current market levels and our latest thinking on monetary policy. We now project a... 4th April 2017 · 1 min read
Global Markets Update Should investors be reassured by confident US consumers? Yesterday’s surge in the Conference Board’s index of US consumer confidence to a 16-year high of 125.6 is not, in our view, a reason to be positive about the outlook for the stock market. Our end-2017... 29th March 2017 · 1 min read
Global Markets Update Will equities in EMs continue to outperform those elsewhere? Emerging market (EM) equities have gained more ground, despite the Trump “reflation” trade in the US stock market faltering. But we doubt that they will continue to perform so well for long. 28th March 2017 · 1 min read
Global Markets Update What does the future hold for Chinese equities? Although our China Activity Proxy suggests that growth in China’s economy has picked up significantly over the past year, we expect growth to slow in the coming quarters as policy support is withdrawn... 24th March 2017 · 1 min read
Global Markets Update How long will the bear market in Treasuries last? Although Treasury yields have fallen back a bit after this week’s anticipated tightening of US monetary policy, we think that the bear market in bonds will resume soon. If history is a guide, the 10... 17th March 2017 · 1 min read
Global Markets Update Policy outlook favours local currency over dollar bonds After raising rates yesterday, we expect the Fed to continue tightening the screws and hike by more than investors are expecting over the next couple of years. However, we think that few emerging... 16th March 2017 · 1 min read
Global Markets Update Contrasting Fed & BoJ policy to boost dollar against the yen We think that the outlook for monetary policy in the US and Japan is consistent with an even stronger dollar against the yen. We are therefore sticking to our forecast that the exchange rate will rise... 15th March 2017 · 1 min read
Global Markets Update How will the markets handle faster Fed tightening? The strong US Employment Report for February has all but sealed the deal for an interest rate rise at this week’s FOMC meeting. Risky asset markets seem relatively unfazed by the prospect, given how... 13th March 2017 · 1 min read
Global Markets Update Calm before another Treasury market storm? The absence of a further sell-off in the US Treasury market so far this year has called into question our forecast that the 10-year yield will rise by a percentage point during the remainder of 2017... 7th March 2017 · 1 min read
Global Markets Update Economics more important than politics for US equities The fate of the US stock market tends to be determined by economics rather than by politics. As a result, it should not be surprising that shareholders have shrugged off both Trump’s recent spat with... 6th March 2017 · 1 min read
Global Markets Update Do high valuations signal a crash in asset prices? The valuations of many assets now look stretched in a historical context. For example, the price/earnings ratio of the US stock market is now far above its very long-run average, and the spreads of... 3rd March 2017 · 1 min read
Global Markets Update What next for US equities and bonds? Although US equities have surged and US government bonds have rallied since Donald Trump entered the White House, we don’t expect this pattern to continue. 27th February 2017 · 1 min read