Global Markets Update Taking stock of EM market performance in previous RMB falls There have only been three previous occasions in the last decade when the renminbi has depreciated to any meaningful extent against the dollar. On two of those occasions the performance of EM markets... 13th August 2015 · 1 min read
Global Markets Update EM markets to rebound once fears about China ease Financial markets in South Korea, Malaysia and commodity-producing EMs will probably continue to suffer the biggest losses if the renminbi depreciates further against the dollar. But we doubt that the... 12th August 2015 · 1 min read
Global Markets Update How vulnerable are US Treasuries to banks’ waning demand? One factor that purportedly prevented US government bond yields from rising in 2014 was banks’ increased appetite for Treasuries, which has waned this year. While other factors could continue to exert... 12th August 2015 · 1 min read
Global Markets Update Renminbi “devaluation” may not be such a big deal Today’s reduction in the daily reference rate for the renminbi has been widely interpreted as the first of many moves whose main purpose is to regain competiveness by devaluing the Chinese currency... 11th August 2015 · 1 min read
Global Markets Update Copper prices could eventually boost equities in Chile and Peru Our bullish view on copper prices suggests that stock markets in Chile and Peru could outperform over the medium-term, but persistently low oil prices look set to be an unwanted headwind for equities... 5th August 2015 · 1 min read
Global Markets Update Ratings downgrade wouldn’t cause Brazilian bond yields to spike Brazil’s deteriorating fiscal position had already caused foreign currency bond yields to rise by 100bp this year and we do not expect any ratings downgrades in the coming weeks to have much of an... 30th July 2015 · 1 min read
Global Markets Update Fed won’t spark EM sell-off today, but data may add to volatility We do not expect any fireworks in EM financial markets after today’s FOMC statement, but with policymakers likely to reiterate that the timing of “lift-off” will be data dependent our upbeat view on... 29th July 2015 · 1 min read
Global Markets Update US Treasuries remain vulnerable to tighter Fed policy Once the US FOMC has begun to raise its target for the federal funds rate, it is widely expected that subsequent increases will be very gradual, as the rate is only slowly returned to a more “normal”... 27th July 2015 · 1 min read
Global Markets Update What next for the Aussie, Kiwi and Loonie? The dollars of Australia, New Zealand and Canada have been three of the worst-performing major currencies so far this year. Despite the fact that they have already fallen a long way, we expect them to... 16th July 2015 · 1 min read
Global Markets Update Euro still likely to fall further The euro remains vulnerable to a resurgence of uncertainty over Greece’s membership of the single currency and the risks of contagion. But even if “Grexit” were off the table completely, the prospect... 13th July 2015 · 1 min read
Global Markets Update Falling equities in China unlikely to trigger a rout elsewhere A 5% fall in the MSCI Emerging Markets (EM) Index since mid-June has primarily been driven by a 15% slump in the MSCI China Index, which in turn can be attributed to the collapse in share prices on... 8th July 2015 · 1 min read
Global Markets Update What next for EMBI+ junk bonds? There is a chance that Ukraine’s foreign currency bonds could perform well in the months ahead if the government can secure a deal with its creditors, but a continuation of unorthodox policy making... 7th July 2015 · 1 min read
Global Markets Update Sterling devaluations & UK equities – implications for Greece If Greece does abandon the euro, our expectation is that it would not be long before her stock market started to boom. This is tied to our belief that devaluation is essential to revitalise Greece’s... 2nd July 2015 · 1 min read
Global Markets Update How much of a boost would a Grexit provide to US Treasuries? The Greek authorities’ decision to call a referendum on the proposals of the country’s creditors triggered a decline of around 20bp in the yield of 10-year Treasuries, which has since been only partly... 30th June 2015 · 1 min read
Global Markets Update Will markets remain this calm if and when Grexit occurs? Although some of the initial reaction in the markets to the decision by the Greek authorities to hold a referendum has been unwound, there is plenty of scope for renewed volatility in the event of a... 29th June 2015 · 1 min read
Global Markets Update Outperformance of EM local currency bonds set to continue We expect emerging market (EM) local currency bonds to continue outperforming their hard currencycounterparts over the next eighteen months as EM interest rates remain lower than the marketgenerally... 26th June 2015 · 1 min read