Global Markets Update Aussie dollar likely to come under further pressure The Australian dollar was the second-worst performing of the G-10 currencies in November behind the Japanese yen, shedding nearly 4% of its value against the US dollar. We expect the Aussie to remain... 3rd December 2013 · 1 min read
Global Markets Update What impact would RMB liberalisation have on Treasuries? The People’s Bank of China (PBC) recently asserted that its intervention in the currency market would “basically” end. If this proves to be the case, it would represent a significant change of heart... 27th November 2013 · 1 min read
Global Markets Update Does the low valuation of UK equities make them appealing? At first glance the UK stock market still appears to be attractively valued, despite a double-digit price rise so far this year. But its valuation has been flattered by strong earnings growth in... 26th November 2013 · 1 min read
Global Markets Update Is slowing globalisation a threat to the US stock market? Labour’s share of income has plummeted in the United States during the past decade. This has provided an important prop to the stock market because its flipside has been a surge in the share of income... 21st November 2013 · 1 min read
Global Markets Update Bonds continue to be shunned EPFR Global data reveal that ETF and mutual fund portfolio flows into emerging market (EM) bonds were negative in October for the fifth month running. By contrast, flows into EM equities were... 20th November 2013 · 1 min read
Global Markets Update More downside for yen and upside for Japanese equities The Nikkei closed back above 15,000 today, helped by a renewed decline in the yen past 100 to the dollar. We expect Japanese equities to advance further and the currency to continue to weaken, due... 15th November 2013 · 1 min read
Global Markets Update Will rising corporate bond yields put pressure on US equities? The earnings yield of a stock market index should be closely related to the average real yield of long-dated bonds issued by its constituents. In the US, we think the latter is likely to rise... 13th November 2013 · 1 min read
Global Markets Update Market implications of a shift in the Fed’s financial repression There is growing speculation that when the Fed eventually announces a tapering of its asset purchases, it will simultaneously lower its unemployment rate threshold. A commitment to keep rates lower... 11th November 2013 · 1 min read
Global Markets Update Will the Fed taper be a game-changer? The question of exactly when the US Fed will start to taper its asset purchases under QE3 has understandably been the focus of much analysis and speculation (including by ourselves). There are six... 5th November 2013 · 1 min read
Global Markets Update Limited upside for the US stock market The US stock market has performed strongly since the end of August, with the S&P 500 posting a total return of nearly 9%. However, we think the index will struggle to make further headway and forecast... 5th November 2013 · 1 min read
Global Markets Update Monetary and fiscal outlook points to further yen weakness The Bank of Japan is likely to maintain its current policy settings at its Board meeting tomorrow. But in contrast to the US Fed, the question is whether the Japanese central bank will eventually have... 30th October 2013 · 1 min read
Global Markets Update Don't write off the dollar The crisis over the debt ceiling, the prospect of “QEternity”, and some recent evidence that foreign investors have been selling US assets have all revived talk that the dollar is facing a prolonged... 25th October 2013 · 1 min read
Global Markets Update Will the euro-zone recovery lift equity earnings? The depressed level of euro-zone aggregate corporate earnings largely reflects the weakness of the region’s economy. While we continue to think that the recovery in GDP will be unspectacular, a... 24th October 2013 · 1 min read
Global Markets Update Equities back in favour EPFR Global data reveal that ETF and mutual fund portfolio flows into emerging market (EM) equities were positive in September for the first month since February. And separate daily data from six... 18th October 2013 · 1 min read
Global Markets Update Debt-ceiling crisis has done lasting damage The lukewarm market reaction to the end of the US government shutdown and the suspension of the debt ceiling can largely be explained by the fact that the chances of default were already assumed to be... 17th October 2013 · 1 min read
Global Markets Update Loss of AAA ratings embarrassing, but probably little more The chaos in Washington has left the US at greater risk of losing its remaining AAA credit ratings even if an imminent default is avoided. However, while this would be a political embarrassment, the... 16th October 2013 · 1 min read