Global Markets Update Yen weakness not the only driver of Nikkei strength The renewed slide in the yen (to 106) against the dollar has helped to revive investors’ interest in the Nikkei, which closed today at its highest level since January. We remain comfortable with our... 9th September 2014 · 1 min read
Global Markets Update Is there a bubble in US “high”-yield corporate bonds? Despite edging up a little over the summer, the yield of US 7-10 year B-rated corporate bonds remains close to its lowest level in at least a quarter of a century. We think that this is a bubble and... 5th September 2014 · 1 min read
Global Markets Update US dollar seems likely to strengthen further The US dollar is close to the strongest it has been against the other major currencies in over a year. But we doubt its rally is over given the relative prospects for monetary policy in the US and... 3rd September 2014 · 1 min read
Global Markets Update What next for the S&P 500? Although the S&P 500 has broken above 2,000 this week for the first time, we doubt that the stock market will go from strength to strength. For now, we are sticking with our forecast that the index... 26th August 2014 · 1 min read
Global Markets Update Further ECB easing could see Bund yields rebound The weakness of the euro-zone economy and the persistent threat of deflation should keep German government bond (Bund) yields relatively low. However, any scaling back of fiscal austerity and the... 26th August 2014 · 1 min read
Global Markets Update Foreign appetite for EM assets continues to grow Despite ongoing geopolitical tensions and the prospect of a shift in Fed policy, emerging market equities are on track to outperform developed market equities for the second quarter in a row. Their... 21st August 2014 · 1 min read
Global Markets Update How might votes for rate hikes in the UK affect markets? If tomorrow’s minutes of the UK Monetary Policy Committee’s latest meeting reveal that some members voted to raise interest rates earlier this month, short-term Gilt yields may rise and sterling... 19th August 2014 · 1 min read
Global Markets Update Brighter outlook for EM than DM government bonds The sharp decline in the yields of local currency government bonds in developed countries has boosted the relative appeal of those in emerging countries. Admittedly, we expect yields in most developed... 15th August 2014 · 1 min read
Global Markets Update Franco-German divergence spells trouble ahead Although purchasing managers surveys for July, released earlier today, suggest that the economicrecovery in the euro-zone as a whole is regaining momentum, they also still show a large gap betweenthe... 24th July 2014 · 1 min read
Global Markets Update Demand for EM equities grows despite Ukraine crisis The crisis in Ukraine is continuing to have very little effect on the financial markets in most other emerging countries, with the notable exception of Russia. In the past month or so, the MSCI... 24th July 2014 · 1 min read
Global Markets Update Market fall-out from Ukraine crisis unlikely to be over The relatively muted reaction in the financial markets so far to the latest tragic turn in the crisis inUkraine – as well as the escalation of the conflict in Gaza and the gains by ISIS in Iraq –... 18th July 2014 · 1 min read
Global Markets Update Is China behind the decline in US Treasury yields? The rally in the US government bond market this year has coincided with a pick-up in China’s netpurchases of long-term Treasury securities, which some have attributed to intervention to weaken... 17th July 2014 · 1 min read
Global Markets Update Will EM assets shrug off tighter US monetary policy? Emerging market (EM) assets sold off sharply last year after the former Chairman of the US central bank hinted that unconventional policy stimulus was on borrowed time. But another rout is by no means... 17th July 2014 · 1 min read
Global Markets Update Low JGB yields not a sign of policy failure The persistently low level of Japanese government bond (JGB) yields is not necessarily a sign that“Abenomics” is failing. Indeed, a premature surge in borrowing costs could put the whole project... 16th July 2014 · 1 min read
Global Markets Update Treasuries vulnerable to a recalibration of rate expectations Ignoring term premiums, the yield of a “risk-free” government bond is a reflection of the short-term rates that are expected until it matures. So if the Fed raises the federal funds rate, there ought... 10th July 2014 · 1 min read
Global Markets Update How will the US stock market handle Fed tightening? The US stock market has tended to fare quite well during previous Fed tightening cycles. Although we think its performance in the next cycle will be below average, we still expect it to creep higher. 7th July 2014 · 1 min read