Global Markets Update Will stock market upheaval deter the Fed from tightening? We doubt the recent plunge in global equity prices will have a major bearing on the FOMC’s decision next month. Nonetheless, it may provide an excuse for the Committee to hold fire. 27th August 2015 · 1 min read
Global Markets Update Economic outlook doesn’t point to a bear market in US equities A slump of around 10% in the S&P 500 since 10th August is unlikely to mark the start of a bear market, which typically only occur in, and around, recessions. We are sticking with our forecast that the... 25th August 2015 · 1 min read
Global Markets Update Sticking with (most of) our forecasts for developed markets We have reviewed our key forecasts for developed markets in light of the renewed slump in China’s stock market and related panic. Despite the turmoil, for now we are retaining our existing forecasts... 24th August 2015 · 1 min read
Global Markets Update Six glimmers of light Today has obviously been an awful day in the markets, particularly for equities and industrial commodities. But stepping back from the headlines, six more positive points are worth stressing. 24th August 2015 · 1 min read
Global Markets Update Why this is not a re-run of previous EM crises An 8.5% fall in the Shanghai Composite Index has sent shockwaves through EM equity markets, but we continue to think that there are few parallels between what is happening now and previous crises... 24th August 2015 · 1 min read
Global Markets Update What next for the Norwegian krone? The Norwegian krone has been the worst-performing G-10 currency since the middle of last year – it has lost more than a quarter of its value against the US dollar. Still, given the prospects for the... 20th August 2015 · 1 min read
Global Markets Update Still room for revision of rate expectations in EM bond market Local currency government bonds have been a port in the emerging market (EM) storm during the past year, as investors have revised down their expectations for policy rates. While they are now... 20th August 2015 · 1 min read
Global Markets Update How at risk are equities in Japan to events in emerging Asia? Although the yen has stayed weak against the US dollar, it has appreciated in trade-weighted terms in response to a slump in some emerging Asian currencies. Still, the yen’s real effective exchange... 19th August 2015 · 1 min read
Global Markets Update Why this is not the Asian Financial Crisis MK2 The recent depreciation of the Indonesian rupiah and Malaysian ringgit against the dollar has left both currencies at levels not seen since 1998, but suggestions that this signals a re-run of the... 18th August 2015 · 1 min read
Global Markets Update Rising unit labour costs a danger to the US stock market Weak productivity growth and rising wage inflation are likely to put upward pressure on unit labour costs in the US over the coming year, squeeze profit margins and cap the upside for the stock market... 14th August 2015 · 1 min read
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
