Global Markets Update Post-FOMC rally in Treasuries is likely to be fleeting FOMC participants’ revisions to their projections for the federal funds rate have boosted Treasuries. But there are three key reasons why we think the rally will be more than reversed in due course. 17th March 2016 · 1 min read
Global Markets Update People’s Bank of China now as important for markets as US Fed The March FOMC meeting is likely to conclude tomorrow with US interest rates left on hold but clear signals that hikes will resume soon. However, the timing will remain dependent both on future US... 15th March 2016 · 1 min read
Global Markets Update Re-examining the outlook for the US dollar Since 20th January, the US dollar has depreciated against the vast majority of the currencies in the Federal Reserve’s broad dollar index. As a result, its value on that measure has fallen by more... 9th March 2016 · 1 min read
Global Markets Update Is the latest rally in Brazilian equities another false dawn? Brazil’s economy is under the cosh, but the 30% rebound in the Bovespa since mid-January has made it one of the top performing equity markets in the emerging world. While we doubt that the stock... 7th March 2016 · 1 min read
Global Markets Update What should we make of the latest decline in TIPS yields? The real yields of US Treasury Inflation Protected Securities (TIPS) have fallen since the US stock market hit a trough on 11 th February. The likely explanation is that investors have become more... 3rd March 2016 · 1 min read
Global Markets Update More evidence that the tide is turning in EM equity markets Emerging market (EM) equities have performed well in recent days, buoyed by rising commodity prices and an increase in purchases by foreign investors. We remain upbeat and still expect the MSCI... 2nd March 2016 · 1 min read
Global Markets Update How big is the Brexit premium? We estimate that sterling would rebound from $1.39 to $1.50 against the dollar if the UK voted today to remain a member of the EU. But if a similar move occurs in response to a vote to stay in the... 24th February 2016 · 1 min read
Global Markets Update Did the US stock market send a false signal again? The US stock market has made significant gains since hitting a trough on the 11th February. We expect it to make more headway as the news from China improves, and do not think that its prior slide... 22nd February 2016 · 1 min read
Global Markets Update How will oil prices affect Treasuries and Bunds? We expect oil prices to recover this year and next. This would exert greater upward pressure on inflation in the US than in the euro-zone and encourage the Fed to raise interest rates further while... 18th February 2016 · 1 min read
Global Markets Update What’s really happening to US inflation expectations? Expectations of lower inflation have probably played only a minor role in the fall in Treasury inflation compensation – the gap between the nominal yields of conventional Treasuries and the real... 17th February 2016 · 1 min read
Global Markets Update Risks of major renminbi devaluation are exaggerated The lack of clarity in China’s data and clumsy communication of policy changes have allowed many scare stories to proliferate. Nonetheless, there is little justification for fears that the renminbi is... 15th February 2016 · 1 min read
Global Markets Update If 2004 was a conundrum, 2016 is even more of a puzzle Eleven years ago, Alan Greenspan described the behaviour of bond markets as a “conundrum” in testimony to the Senate. This was because long-term yields had trended lower, even as the US FOMC had... 15th February 2016 · 1 min read
Global Markets Update We still expect euro-zone and UK equities to rebound We are nudging down our end-2016 forecasts for the euro-zone and UK stock indices in light of the recent market turmoil. Nevertheless, we still expect them to rebound. 12th February 2016 · 1 min read
Global Markets Update Where next for Argentine bonds? The medium-term outlook for Argentina’s economy has undoubtedly improved since the election of President Macri, but we see little room for the rally in the bond market to continue. Indeed, with a lot... 12th February 2016 · 1 min read
Global Markets Update What can Japan do about a stronger yen? The surge in the yen against the US dollar has understandably raised expectations of further action to weaken the Japanese currency. We think the Bank of Japan is unlikely to intervene directly in the... 11th February 2016 · 1 min read
Global Markets Update Sticking to our view that the US stock market will rebound We are pulling down our forecasts for the S&P 500. Nonetheless, our new projections still imply significant gains from the index’s current level. We are not tempted to throw in the towel and project a... 9th February 2016 · 1 min read