Global Markets Update What’s going on with EM currencies? After staging a decent recovery this year, almost all EM currencies have weakened against the US dollar so far this month. Some may weaken a little further, but we think a large sell-off is unlikely. 17th May 2016 · 1 min read
Global Markets Update What next for US Treasuries? While we continue to expect the FOMC to hike the federal funds rate by 25bp at least twice this year, two such increases are currently anticipated by investors in the bond market . We are therefore... 16th May 2016 · 1 min read
Global Markets Update Rebound in oil prices is indeed a game-changer The recovery in oil prices has now taken Brent above our end-2016 forecast of $45 per barrel. We would not be surprised to see the rally pause for breath soon, but remain comfortable with our view... 21st April 2016 · 1 min read
Global Markets Update IMF behind the curve on EM capital flows The IMF was at pains to highlight the threat of capital outflows from emerging markets (EMs) in the April edition of its World Economic Outlook. But the recent rally in EM financial markets seems to... 21st April 2016 · 1 min read
Global Markets Update Will the dollar’s boost to US equities last? The recent weakness of the dollar has provided a boost to the US stock market which we do not expect to last. Admittedly, we do not anticipate another big increase in the US currency’s trade-weighted... 20th April 2016 · 1 min read
Global Markets Update German Bund yields – how low can they go? We think the yield of 10-year Bunds is unlikely to follow that of Japanese government bonds (JGBs) in turning negative, despite the fact that it came within a whisker of its historical low at the... 15th April 2016 · 1 min read
Global Markets Update Is this a temporary setback for the dollar? Three key developments explain the US dollar’s slide against other major currencies since its peak on 20 th January – higher commodity prices, increased appetite for safe havens and a scaling back of... 12th April 2016 · 1 min read
Global Markets Update A simple economist’s view of the euro and the yen The recent weakness of the US dollar against the euro and especially the yen has already led many to tear up their currency forecasts for the year. However, expectations for US monetary policy still... 8th April 2016 · 1 min read
Global Markets Update Are EM equities just a play on oil? An increase in the price of oil in the past day or two has helped at least some equity markets in the emerging world to snap their poor start to the second quarter. We doubt that oil prices will climb... 7th April 2016 · 1 min read
Global Markets Update Renminbi still likely to weaken further against the US dollar The appreciation of China’s currency against the US dollar this year, while small, has confounded market fears of a substantial devaluation . Nonetheless, even if the PBOC continues to target broad... 6th April 2016 · 1 min read
Global Markets Update How much longer will yen strength weigh on the Nikkei? April may prove to be a crunch month for our view that renewed currency weakness will allow Japanese equities to outperform again. If the yen fails to drop back in response to further monetary easing... 5th April 2016 · 1 min read
Global Markets Update Yellen remarks underline the pivotal role of oil prices Despite the dovish spin put on Janet Yellen’s latest remarks, global markets will probably stillhave to contend with more Fed tightening this year. However, the prices of many commodities, including... 30th March 2016 · 1 min read
Global Markets Update Shanghai Discord likely to weaken the euro again Fed Chair Janet Yellen’s speech later today will, of course, be keenly watched for hints on the outlook for US interest rates. However, there have already been signs that the markets are reassessing... 29th March 2016 · 1 min read
Global Markets Update Bubble trouble? Loose monetary policy increases the appeal of “risky” assets. This is a positive thing when their valuations are low, as they were in the aftermath of the financial crisis. It is, however, a... 23rd March 2016 · 1 min read
Global Markets Update What next for US equities? We have revised up our forecasts for the S&P 500 slightly and now project that it will make more headway after recouping all the ground that it lost earlier this year. Nonetheless, we don’t expect the... 22nd March 2016 · 1 min read
Global Markets Update Was there a “Shanghai Accord” to weaken the dollar? Speculation that G20 officials came to a tacit deal in Shanghai last month to end the “currency wars” that have boosted the US dollar fits a few of the facts, but overall makes no sense. Neither the... 18th March 2016 · 1 min read