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
Global Markets Update Will India really deliver equity-friendly reforms? The prospect of a new government delivering economic reform in India has provided a substantial boost to the country’s stock market. Although we are also optimistic that a new government will make... 14th May 2014 · 1 min read
Global Markets Update Will the US stock market ride out a shift in Fed policy? The cost of corporate equity is much lower than the cost of corporate debt in the US. This is very different to the situation that prevailed during the dot com bubble and is a reason to think that the... 8th May 2014 · 1 min read
Global Markets Update Investors flee China’s equity market Net selling by global ETFs and mutual funds dedicated to investing in equities in China was larger in March than in any other month on record according to EPFR Global. This presumably reflected... 24th April 2014 · 1 min read
Global Markets Update ECB’s QE unlikely to be the panacea that markets hope The ECB looks increasingly willing to implement some form of explicit quantitative easing (QE) soon. However, the market impacts may be smaller and more varied than widely hoped. 22nd April 2014 · 1 min read
Global Markets Update Is there a bubble in technology stocks? One reason for the sell-off in the US stock market in the first half of this month appears to have been concern that valuations in the technology sector are stretched. But there is little evidence to... 17th April 2014 · 1 min read
Global Markets Update What is the outlook for global real yields? One development that is likely to cap future rises in long-term government bond yields in some of the major advanced economies is the persistence of exceptionally loose monetary policy. But this is... 9th April 2014 · 1 min read
