Global Markets Update Is the Russian ruble “extremely undervalued”? We are not convinced by the Russian finance ministry’s claim on Wednesday morning that the ruble is “extremely undervalued”. After all, Russia has undergone an enormous deterioration in its terms of... 17th December 2014 · 1 min read
Global Markets Update Will frontier market equities continue to underperform? The sharp drop in oil prices has played a major role in the recent poor performance of the MSCI Frontier Markets (FM) Index, in which a small number of oil exporting countries have large weightings... 15th December 2014 · 1 min read
Global Markets Update How would prolonged deflation affect euro-zone equities? It is tempting to think that a prolonged period of mild deflation in the euro-zone would be terrible news for equities. After all, Japan’s stock market generally fared poorly for much of the time... 15th December 2014 · 1 min read
Global Markets Update Is the lower oil price a threat to US Treasuries? It is sometimes argued that a lower oil price is a threat to Treasuries because oil exporters typically save a larger share of their income than oil importers and are more inclined to put their... 8th December 2014 · 1 min read
Global Markets Update Will Venezuela’s oil problems spill over? Would a sovereign default in Venezuela, which now seems increasingly likely given the plunge in the price of oil, cause upheaval in the global financial markets? We suspect not, even though a... 3rd December 2014 · 1 min read
Global Markets Update What if the Swiss vote to “save our gold”? This weekend the Swiss public will probably reject a proposal to force the Swiss National Bank (SNB) to increase its gold holdings. Nonetheless, a surprise “yes” would provide a significant boost to... 28th November 2014 · 1 min read
Global Markets Update Are investors set to flee emerging market assets? October saw net outflows from global ETF and mutual funds that invest in emerging market (EM) assets for the first time since March. This was primarily driven by net outflows from funds that invest in... 28th November 2014 · 1 min read
Global Markets Update Are Bunds the new JGBs? While we are still not convinced that the euro-zone is the new Japan, despite the many similarities in their economic predicaments, we are increasingly of the view that the 10-year Bund yield will... 25th November 2014 · 1 min read
Global Markets Update Will the yen bounce back? There have been three episodes in the past twenty years when the yen has rebounded substantially following a sustained period of depreciation. In each case, the trigger was an increase in financial... 20th November 2014 · 1 min read
Global Markets Update How vulnerable are other Asian currencies to yen weakness? It is tempting to think that a further sharp fall in Japan’s currency would prompt policymakers in the rest of Asia to try to weaken their own in an effort to maintain their competitiveness. But there... 19th November 2014 · 1 min read
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
