Global Markets Update Are record “shorts” a new threat to sterling? Non-commercial participants, sometimes described as “speculators”, are now running a record number of short positions in the pound against the dollar, according to US data. However, this alone does... 30th August 2016 · 1 min read
Global Markets Update Should we be concerned about EM equities again? We continue to expect emerging market (EM) equities to rise further in the next couple of years, even as the Fed tightens monetary policy. But the rally has fizzled out in recent days, and we suspect... 24th August 2016 · 1 min read
Global Markets Update Why aren’t the markets more worried about the renminbi? China’s currency continues to weaken and has now fallen by around 7% on a trade-weighted basis this year. But while past episodes of renminbi (RMB) depreciation have rattled global markets, they have... 23rd August 2016 · 1 min read
Global Markets Update Too soon to sound the “all clear” on Brexit risks In the last few days there has been a lively debate in the UK media over whether Brexit ‘Armageddon’ has been avoided. Our view is that it is far too early to say for sure and that sterling in... 22nd August 2016 · 1 min read
Global Markets Update Are Treasuries vulnerable to waning demand from overseas? A sharp increase in the cost of hedging has diminished the appeal of Treasuries to many foreign investors, especially those whose funds are denominated in yen and euros. This is potentially... 16th August 2016 · 1 min read
Global Markets Update China adds to the outperformance of EM equities Whereas the collapse in Chinese equity prices sent global markets into meltdown last summer, they have begun to drive the outperformance of the MSCI Emerging Markets Index in recent weeks. A shift in... 12th August 2016 · 1 min read
Global Markets Update Stars continue to align for EM equities The rally in emerging market (EM) equities has been given another leg up as it has become less likely that the Fed will hike interest rates any time soon, and China’s economy has shown signs of... 1st August 2016 · 1 min read
Global Markets Update US Treasuries, credit spreads and the hunt for yield We doubt that spreads on US corporate bonds are set to widen, even though we expect the yields of Treasuries to rise as the Fed tightens policy faster than investors currently anticipate. Past form... 29th July 2016 · 1 min read
Global Markets Update Is the Nikkei about to be lifted by ‘helicopter money’? We remain cautiously optimistic about the outlook for Japanese equities. However, this is based on the assumption that ‘conventional’ QE will drag the yen lower again, rather than the financing of... 12th July 2016 · 1 min read
Global Markets Update Is sterling a good indicator of global Brexit risks? The renewed slide in the value of the pound yesterday has prompted fresh jitters in global financial markets, as well as increased demand for traditional safe havens such as gold and the yen. But... 6th July 2016 · 1 min read
Global Markets Update What next for EM equities? British politics remains in turmoil following the vote for “Brexit”, but emerging market (EM) equities do not. There are likely to be more periodic sell-offs in risky assets in the months ahead, but... 4th July 2016 · 1 min read
Global Markets Update New market forecasts in the wake of the “Brexit” vote Our existing market forecasts were premised on an assumption that the UK would vote to remain in the EU. After the vote to leave, we have allowed the initial dust to settle, reviewed our projections... 30th June 2016 · 1 min read
Global Markets Update Why have equity markets rebounded after the Brexit vote? There are several plausible reasons why the prices of equities and other riskier assets have recovered after the UK’s vote to leave the EU. Some of these may be temporary, notably short covering. More... 30th June 2016 · 1 min read
Global Markets Update Brexit may not delay the next US rate hike for very long The markets are probably right to price in additional policy easing from the Bank of England and the ECB in the wake of the UK’s vote to leave the EU (‘Brexit’). However, the consensus is almost... 29th June 2016 · 1 min read
Global Markets Update Sterling & UK equities – no 1992 redux Sterling’s slide in the aftermath of the UK’s vote on EU membership is reminiscent of its slump after the country withdrew from the European Exchange Rate Mechanism (ERM) in 1992. Not surprisingly... 28th June 2016 · 1 min read
Global Markets Update Putting recent market moves into perspective While some equity indices fell further on Friday than on the day after the bankruptcy of Lehman Brothers, it would be wrong to conclude that the world is on the cusp of another global financial crisis... 27th June 2016 · 1 min read