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
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
