Global Markets Update Plenty of scope for further Nikkei outperformance Japanese equities outperformed their peers in June and have continued to do well so far in July. We believe there is still plenty of scope for further gains in the Nikkei 225 even if, as we expect... 4th July 2014 · 1 min read
Global Markets Update Market implications of our revised forecast for Fed policy We now think that the US FOMC will tighten monetary policy sooner, and by more, than we had previously envisaged. Our revised view is that the federal funds rate will end 2016 at 3.0%, rather than 2.5... 2nd July 2014 · 1 min read
Global Markets Update How vulnerable are US corporate bonds to tighter Fed policy? The onset of Fed tightening has not tended to drive up spreads on investment-grade corporate bonds much in the past. In fact, in the majority of the seven major tightening cycles since the early 1970s... 27th June 2014 · 1 min read
Global Markets Update Volatility versus value in the emerging markets We do not think that an end to the current low level of volatility in financial markets would necessarily dull investors’ appetite for riskier assets in the emerging world. In fact, our view is that... 25th June 2014 · 1 min read
Global Markets Update Will EM assets shrug off tighter Fed policy? We are sceptical that tighter US monetary policy will spell disaster for emerging market (EM) assets. Granted, their prices fell sharply after Ben Bernanke first hinted that the Fed was thinking about... 24th June 2014 · 1 min read
Global Markets Update Another selection of our non-consensus calls This Update provides some examples of where our views on the economic and market outlook differ significantly from the consensus. It draws on the range of country and regional services produced by our... 23rd June 2014 · 1 min read
Global Markets Update Market implications of our revised UK Bank Rate forecast The strength of the UK’s economic recovery and more hawkish signals coming from members of the Bank of England’s Monetary Policy Committee (MPC) have prompted us to revise our projection for the path... 19th June 2014 · 1 min read
Global Markets Update Should we expect another "conundrum" in the bond market? The 10-year Treasury yield rose by only a small amount during the Fed’s last major tightening cycle. But this “conundrum” was largely the result of a collapse in the term premium (TP) from a level... 18th June 2014 · 1 min read
Global Economics Update Iraq crisis tops a long list of geopolitical risks There are good reasons to be relaxed about the global economic fall-out from the latest crisis in Iraq, including the possibility that it might actually lead to an improvement in relations between the... 16th June 2014 · 1 min read
Global Economics Update Low market volatility is raising long-term risks The low levels of volatility in financial markets reflect a high degree of confidence in the ability of the authorities to prevent crises and respond to shocks, expectations that any policy changes... 10th June 2014 · 1 min read
Global Markets Update ECB falls well short of Bank of Japan’s bold easing The muted market responses to the ECB’s policy announcements today are not necessarily a sign of failure: equity prices, bond yields and the euro itself all edged a little further in the desired... 5th June 2014 · 1 min read
Global Markets Update What's really behind the drop in long-term Treasury yields? According to the minutes of late-April’s US FOMC meeting, “some market participants reportedly ... revised down their estimate of the average real federal funds rate over the longer term, reflecting... 2nd June 2014 · 1 min read
Global Economics Update Weak global growth unlikely to prevent rebound in US yields Canada continues to lead the recovery among the G7 economies after a relatively shallow recession. However, the US is only just behind, despite stumbling in Q1, and looks in better shape. Softness... 30th May 2014 · 1 min read
Global Markets Update What might QE in the euro-zone mean for bonds elsewhere? It has been suggested that one important factor keeping US Treasury yields low is the prospect of a further loosening of monetary policy by the ECB, including some form of explicit quantitative easing... 27th May 2014 · 1 min read
Global Markets Update Investors rediscover their enthusiasm for EM assets April was the first month in over a year in which there were net inflows into global ETF and mutual funds that invest in emerging market (EM) assets. Investors’ growing enthusiasm for emerging market... 22nd May 2014 · 1 min read
Global Markets Update Do rising term premia pose a threat to US Treasuries? Some observers appear to be concerned that the onset of US monetary tightening will drive up long-term Treasury yields via a substantial increase in “term premia”. But a new set of unofficial data... 15th May 2014 · 1 min read