Global Markets Update Yen to fall to 140 against the US dollar Japan’s drop back into recession will strengthen the disinflationary pressures in the economy and reinforces the divergence in the prospects for monetary policy relative to those in the US. As a... 17th November 2014 · 1 min read
Global Markets Update Why is cheaper oil not boosting the S&P 500 more? While the decline of nearly 30% in the price of oil since 20th June ought to boost the US economy, we think the muted reaction in the stock market – the S&P 500 has gained only 4% – makes sense. 12th November 2014 · 1 min read
Global Markets Update How should bond markets respond to lower oil prices? While the slump in oil prices will reduce inflation in the major economies, it should also boost economic growth – at least where inflation is not dangerously low to begin with. The net effect on... 11th November 2014 · 1 min read
Global Markets Update Is there still value in Japanese equities? Japanese equities have paused for breath following the surge in the wake of the additional easing announced by the Bank of Japan and the reweighting of the government pension fund in favour of stocks... 10th November 2014 · 1 min read
Global Markets Update Is the strong dollar a threat to the US stock market? Although the US stock market has rebounded in recent weeks, one development that could cap its upside is a further rally in the dollar. A strengthening currency causes exporters to lose market share... 4th November 2014 · 1 min read
Global Markets Update What does Bank of Japan easing mean for the rest of the world? So much for the end of QE! The Bank of Japan’s announcement today that is stepping up its asset purchases is a timely reminder that not everyone has to follow the Fed. We would be wary of speculation... 31st October 2014 · 1 min read
Global Markets Update Support from the Fed’s QE is not about to disappear The widely anticipated completion of the Fed’s purchases under QE3 need not mark the end of the policy’s support for global asset prices. As it happens, QE3 was not much of a boon to emerging markets... 28th October 2014 · 1 min read
Global Markets Update Will inflows from abroad pick up again soon? Net inflows into global ETF and mutual funds in September were at their lowest level since March, when there was last an outflow. While this was due in part to a continued small outflow from funds... 23rd October 2014 · 1 min read
Global Markets Update Equities should stage a partial recovery before year-end There are, of course, plenty of reasons why the performance of equities can decouple from that of the economy. But the recent slump in stock prices does not appear to be justified by the economic data... 16th October 2014 · 1 min read
Global Markets Update Will Treasury and Bund yields continue to diverge? Although the spread between the yields of 10-year US Treasuries and German Bunds is already close to its largest since the start of European Monetary Union, we see little reason why it should not... 14th October 2014 · 1 min read
Global Markets Update Is this the beginning of a bear market in US equities? The decline of more than 5% in the S&P 500 since its mid-September high is unlikely to mark the beginning of a bear market. This is because bear markets typically only occur in, and around, recessions... 13th October 2014 · 1 min read
Global Markets Update A stronger economy could be a mixed blessing for US equities A stronger economy would clearly be better news for the US stock market than another recession. But it might not provide much of a boost to share prices if the labour market becomes too tight. If... 2nd October 2014 · 1 min read
Global Markets Update Is foreigners’ appetite waning? August was the fifth month in a row in which there were net inflows into global ETF and mutual funds that invest in emerging market assets. Admittedly, there was a small net outflow from funds that... 1st October 2014 · 1 min read
Global Markets Update The dollar is likely to rise even further Rather than being a sign that global growth is faltering, the recent decline in international oil prices mainly reflects improving supply conditions. As such, it should provide a modest boost to... 29th September 2014 · 1 min read
Global Markets Update Will UK Gilts continue to outperform US Treasuries? The yield of 10-year Gilts has fallen clearly below that of 10-year Treasuries for the first time since the spring. Whilst it would be premature to talk of a significant decoupling, we suspect that UK... 16th September 2014 · 1 min read
Global Markets Update Growing competitiveness bolsters outlook for EM equities Most emerging market (EM) countries have become more competitive over the past year. This bodes well for equity returns in these countries in the long run. However, other factors are as likely to have... 11th September 2014 · 1 min read