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has picked up significantly over the past year, we expect growth to slow in the coming quarters as policy support is withdrawn... 24th March 2017 · 1 min read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
Global Markets Update Rebound in EM currencies unlikely to last Having lost ground against the dollar in the aftermath of the US elections, emerging market (EM) currencies have staged a recovery since President Trump’s inauguration. Nonetheless, we still expect... 24th February 2017 · 1 min read
Global Markets Update How will equities react to Trump’s “phenomenal” tax plan? An overhaul of the US corporate tax code would probably provide a net boost to S&P 500 earnings. Nonetheless, we suspect that it would be small and that it has now been largely discounted in equity... 23rd February 2017 · 1 min read
Global Markets Update Rising inflation expectations to lift Treasury yields further While US break-even inflation rates have recently risen, this appears primarily to reflect increased uncertainty about the inflation outlook. As actual expectations for inflation rise and investors... 16th February 2017 · 1 min read
Global Markets Update Will rising metals prices continue to boost EM equities? The latest rise in industrial metals prices has provided a welcome fillip to emerging market equities, which are now at their highest level for more than a year and a half. However, we think that this... 15th February 2017 · 1 min read
Global Markets Update Will the Japanese keep shunning Treasuries? The news that Japanese investors have been selling large amounts of US Treasuries reinforces our view that reduced appetite from overseas investors will play a role in driving up their yields this... 13th February 2017 · 1 min read
Global Markets Update What will Fed tightening mean for EM dollar bonds? Although emerging market (EM) dollar-denominated government bonds yields have fallen during the past two bouts of US monetary tightening, this time around we expect them to rise as aggressive rate... 2nd February 2017 · 1 min read
