Global Markets Update Accounting for stock market overvaluation One criticism levelled at Robert Shiller’s cyclically-adjusted price/earnings ratio (CAPE) is that – for the S&P 500 at least – the denominator has been depressed by accounting changes. This has led... 6th September 2013 · 1 min read
Global Markets Update Why is ‘forward guidance’ failing to anchor long-term Gilts? The MPC’s commitment to keep interest rates on hold has failed to prevent the yield on 10-year Gilts rising by more than that on US Treasuries. But we think the difference in monetary policy prospects... 4th September 2013 · 1 min read
Global Markets Update How has the Bank of Japan kept yields low? The surge in the yields of US Treasuries since May has been mirrored, to varying degrees, in most other advanced economies. In contrast, the yields of Japanese government bonds (JGBs) have decoupled... 2nd September 2013 · 1 min read
Global Markets Update Will emerging market currencies suffer a re-run of 2008? The extent of the latest rout in emerging market currencies has prompted comparisons with previous crises, such as that in the autumn of 2008. But we suspect some recovery may be around the corner... 29th August 2013 · 1 min read
Global Markets Update Prospects for Emerging European equities are Poles apart A number of equity markets in Emerging Europe – Poland’s in particular – have proved relatively resilient during the recent emerging market sell-off. We think they may continue to outperform equities... 27th August 2013 · 1 min read
Global Markets Update Has the Brazilian bond market gone nuts? We doubt the recent significant underperformance of Brazil’s local currency government bonds will last. A surge in yields has been mainly driven by expectations of much more aggressive monetary... 21st August 2013 · 1 min read
Global Markets Update The floodgates re-open … at least temporarily The respite enjoyed by emerging markets (EMs) during the first half of July has not lasted. Indeed, net portfolio inflows remained negative over the course of the month as a whole according to EPFR... 20th August 2013 · 1 min read
Global Markets Update Does it still make sense to rotate out of bonds into equities? The year-to-date returns from US equities and (7-10 year) US Treasuries are plus 18% and minus 6%, respectively. Judging by recent shifts in asset allocation, many expect the superior performance of... 19th August 2013 · 1 min read
Global Markets Update What next for euro-zone equities? Today’s euro-zone GDP data provided a further small boost to the region’s stock markets, which have been enjoying something of a revival in the second half of 2013. However, the economic outlook in... 14th August 2013 · 1 min read
Global Markets Update Yen’s recovery likely to be temporary There are many factors behind the recent partial recovery in the yen and associated weakness in the Nikkei, but perhaps the most important is fading expectations of more aggressive monetary easing by... 12th August 2013 · 1 min read
Global Markets Update Will forward guidance provide a major boost to Gilts? The UK MPC’s "forward guidance" had little initial impact on Gilts on Wednesday but we still think it will help them to outperform US Treasuries over time. That being said, we do not expect the 10... 7th August 2013 · 1 min read
Global Markets Update Stock market implications of capitalising intellectual property The recent change to the accounting treatment of some types of "intellectual property products" in the US national income and product accounts has resulted in a decline in the price/earnings ratio of... 6th August 2013 · 1 min read
Global Markets Update The floodgates start to close Net capital inflows into emerging markets (EMs) were significantly negative in June as investors fretted about a change in the Fed’s monetary policy. Although the selling continued in the early part... 23rd July 2013 · 1 min read
Global Markets Update Monetary policy to remain loose even with Fed tapering Our research has consistently emphasised that monetary conditions in the major advanced economies are likely to remain exceptionally loose for several years even after the US Fed ends its asset... 16th July 2013 · 1 min read
Global Markets Update Some of our best non-consensus calls (and a few lemons) We are often asked for examples of bold non-consensus calls that have been proved right. This Update provides a selection from the last few months across a range of our services. The publications... 15th July 2013 · 1 min read
Global Markets Update Bernanke bashing illustrates limits of “forward guidance” Many of the criticisms of the US Fed’s recent communications on monetary policy are, in our view, unfair. However, the difficulty that the media and markets have found in drawing clear conclusions... 12th July 2013 · 1 min read