Global Markets Update A fresh look at currency misalignment The Peterson Institute for International Economics (PIIE) recently published its latest semi-annual estimates of fundamental equilibrium exchange rates (FEERs). These suggest that the Colombian peso... 1st June 2016 · 1 min read
Global Markets Update Will “A-shares” make the grade and would it matter? Were China’s “A-shares” to be included in the MSCI Emerging Markets Index it may not be the big deal that some expect. A-shares would probably only be dripped into the Index, while the outlook for... 31st May 2016 · 1 min read
Global Markets Update More musings on US and European equities As we noted in our Global Markets Update, “How do the valuations of US and European equities stack up?”, which was published on Monday, the stock market in the US can be considered either to be... 26th May 2016 · 1 min read
Global Markets Update Renminbi weakness needs to be seen in perspective The renewed slide in the renminbi against the US dollar may revive concerns about a broad-based devaluation of the Chinese currency. However, as we have argued before, context is everything, and here... 25th May 2016 · 1 min read
Global Markets Update Will EM currencies underperform as the Fed hikes? Emerging market (EM) currencies have not always underperformed during Fed tightening cycles and we do not expect them to do so this time, even as US rates rise further than is generally anticipated 25th May 2016 · 1 min read
Global Markets Update Would Brexit really be a game-changer for global markets? The trends in the opinion polls and in bookmakers’ odds suggest that a UK vote to leave the EU (“ Brexit ”) would now be a major surprise. Given this, the initial uncertainty caused by Brexit would... 23rd May 2016 · 1 min read
Global Markets Update How do the valuations of US and European equities stack up? Is the stock market in the US overvalued or undervalued relative to its counterpart in Europe? The answer largely depends on which metric is chosen and how earnings evolve. 23rd May 2016 · 1 min read
Global Markets Update What if the Fed does hike again in June? Our central forecast is that US interest rates will be raised twice this year, probably in September and December, but we suspect that the chances of a hike on 15th June are rather higher than the 30%... 19th May 2016 · 1 min read
Global Markets Update Will “other forces” keep US Treasury yields down? US Treasury yields continue to be depressed by other forces besides the expectation that the federal funds rate will remain very low in the future. Some of these forces are likely to persist over the... 18th May 2016 · 1 min read
Global Markets Update Will rising Treasury yields rattle EMs next year? We now think that the 10-year US Treasury yield will rise by about 100bp in 2017. Nonetheless, unlike previous occassions when it has risen sharply, we doubt that it will lead to a crisis in emerging... 17th May 2016 · 1 min read
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
