Global Markets Update On the relative valuation of US equities and bonds One reason why Fed tightening may not rattle the US stock market is that the price of equity is currently low compared to that of debt. Our forecast is that the S&P 500 will end next year at 2,200... 24th June 2015 · 1 min read
Global Markets Update What explains the recovery in the euro? Despite the crisis in Greece the euro remains near multi-week highs against the dollar. Some have suggested that the euro has actually benefited from the uncertainty, due to the unwinding of short... 22nd June 2015 · 1 min read
Global Markets Update New forecasts for US Treasuries We have revised up our end-2015 and end-2016 forecasts for the 10-year US Treasury yield by 50bp each, to 3.0% and 3.5%. Our previous forecasts for the yield, which is now around 2.3%, had been based... 19th June 2015 · 1 min read
Global Markets Update Fed tightening unlikely to trigger a re-run of 1994 EM crash Fed tightening will probably be more aggressive than the market expects, but we do not expect it to trigger a re-run of the 1994 crash in EM financial markets. 18th June 2015 · 1 min read
Global Markets Update How would euro-zone equities fare after a “Grexit”? If Greece does default on her sovereign debt, the euro-zone stock market will probably fall further, especially if this is swiftly followed by her abandoning the euro. But even in the event of a “... 17th June 2015 · 1 min read
Global Markets Update Further big falls in EM currencies unlikely, but expect volatility The Greek crisis appears to be coming to a head, but so far at least there has been very little negative impact on emerging market currencies. Should Greece default, and especially if that entails... 16th June 2015 · 1 min read
Global Markets Update A macroeconomic approach to US stock market valuation The valuation of the US stock market does not appear as high when quantified with macroeconomic data as it does when a more conventional approach is taken. What’s more, we continue to think that the... 12th June 2015 · 1 min read
Global Markets Update A selection of our key calls (advanced economies) This note summarises our key calls for the advanced economies and markets, emphasising where we differ from the consensus. Detailed projections (with specific numbers) are available in our regular... 11th June 2015 · 1 min read
Global Markets Update Would it be a big deal if A-shares were included in the MSCI? Many commentators have speculated that MSCI will add China’s “A-shares” to the MSCI China Index at its Annual Market Classification Review on 9th June. This would boost China’s weighting in its wider... 8th June 2015 · 1 min read
Global Markets Update Is this really the start of a bear market in Bunds? Although the yields of German Bunds have risen significantly since late-April, we doubt they will continue to surge given the prospects for ECB policy and the probability of renewed safe-haven flows... 4th June 2015 · 1 min read
Global Markets Update Renewed dollar strength has further to go Diverging prospects for economic growth and monetary policy point to additional gains for the dollar this year, especially against the euro and the yen. The real possibility that Greece will be the... 27th May 2015 · 1 min read
Global Markets Update What next for the MSCI EM Asia Index? Net foreign purchases of equities are published on a daily basis in five of the eight countries in the MSCI Emerging Markets Asia Index – India, Indonesia, the Philippines, South Korea and Thailand... 26th May 2015 · 1 min read
Global Markets Update Yen to fall to 140 against the US dollar The yen’s tentative break of 120 against the dollar in the past week has refocused attention on the currency pair after several months of stability. We continue to expect the yen to weaken... 22nd May 2015 · 1 min read
Global Markets Update Which currencies are fundamentally misaligned? The Peterson Institute for International Economics (PIIE) is due to publish its latest semi-annual estimates of fundamental equilibrium exchange rates (FEERs) soon. These are likely to suggest that... 20th May 2015 · 1 min read
Global Markets Update Is a rise in Treasury yields a threat to the US stock market? We are sceptical that a further sell-off in Treasuries would drive the US stock market down, as some are suggesting. Although we forecast that the 10-year US government bond yield will continue to... 14th May 2015 · 1 min read
Global Markets Update What next for US and euro-zone government bonds? While government bonds in the US and the euro-zone have both been rattled by a rebound in the price of oil, we think other factors will start to play a more important role in determining their fate. 8th May 2015 · 1 min read