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
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
