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
Global Markets Update Revising, but not renouncing, our view of US Treasuries We have revised down our forecasts for the 10-year US Treasury yield. Nonetheless, our new forecasts still imply that the yield will climb significantly from its current level of 1.8%, as the Fed... 8th February 2016 · 1 min read
Global Markets Update We think sub-zero long-term JGB yields lie ahead We expect the Bank of Japan to reduce its deposit rate much further into negative territory over the course of the next year. (See our Japan Economics service for details.) This reinforces our view... 2nd February 2016 · 1 min read
Global Markets Update Mixed outlook for the major commodity currencies The recovery in commodity prices over the last week or so has eased the selling pressure on the dollars of Australia, New Zealand and Canada since the start of the year. However, we wouldn’t be... 2nd February 2016 · 1 min read
Global Markets Update Japanese equities ripe for a rebound In the light of the recent turmoil we are revising our forecasts for Japan’s currency and equity prices. Nonetheless, we continue to expect a combination of better news from China, a partial recovery... 21st January 2016 · 1 min read
Global Markets Update What next for the dollar? We have reduced the amount by which we forecast the dollar to strengthen against the euro and the yen this year, but increased the amount by which we project that it will appreciate against sterling... 21st January 2016 · 1 min read
Global Markets Update Portuguese government bond spreads likely to creep higher The recent rise in Portuguese government bond yields appears to be largely due to a general increase in risk aversion, rather than factors specifically related to Portugal. However, we think that... 19th January 2016 · 1 min read
