Global Markets Update Too soon to write off the pound The recent weakness in the pound against the US dollar has produced the usual flurry of headlines about an imminent sterling crisis. However, while the relative prospects for monetary policy in the US... 8th July 2013 · 1 min read
Global Markets Update Is the Treasury market braced for future Fed tightening? We think the US federal funds rate will have been raised to about 4% by the end of 2017. However, based on a decomposition of the Treasury yield curve, it looks like the bond market is more or less... 2nd July 2013 · 1 min read
Global Markets Update A more cautious view on gold The slump in the price of gold to less than $1,200 per ounce on Friday forced us to take a more cautious view of the prospects for the precious metal. Nonetheless, our revised forecasts assume a bit... 1st July 2013 · 1 min read
Global Markets Update How far can the Bank of Japan's QE replace the Fed's? Japanese investors are perhaps more likely to follow global trends than to lead them, but the Bank of Japan will help keep global monetary conditions loose even when the Fed starts to taper QE3. 27th June 2013 · 1 min read
Global Markets Update Can bond yields elsewhere decouple from the US? There has not been much differentiation between bond markets during the recent US-led sell-off. But over time we expect local economic conditions and domestic monetary policy to play a larger role... 25th June 2013 · 1 min read
Global Markets Update Bond market lessons from the early 1950s The recent surge in long-term US Treasury yields will certainly have raised a few eyebrows. However, if the Fed’s forthcoming approach to unwinding unconventional monetary policy stimulus bears any... 24th June 2013 · 1 min read
Global Markets Update New market forecasts In the light of the changing prospects for US monetary policy and recent improvements in the outlook for the advanced economies, we are revising our bond yield forecasts higher. However, we continue... 20th June 2013 · 1 min read
Global Markets Update Will the worst soon be over for emerging market equities? Emerging market equities have come under further pressure today after last night’s FOMC statement. Although the prospect of a tapering of the US central bank’s quantitative easing could continue to... 20th June 2013 · 1 min read
Global Markets Update Beating a retreat Recent data suggest that net capital inflows into emerging markets (EMs) fell significantly in May and in the first half of June amid renewed concerns about a potential tapering of the Fed’s asset... 18th June 2013 · 1 min read
Global Markets Update Making sense of the market turmoil We will be reviewing all our key market forecasts in the coming days, but recent developments have underlined several of the global and regional themes that we have been stressing for some time. 13th June 2013 · 1 min read
Global Markets Update What's behind the rebound in the yen? The rebound in the yen and associated weakness in Japanese equities reflect fears about the outlooks for monetary policy in both Japan and the US. However, these fears look increasingly overdone. 13th June 2013 · 1 min read
Global Markets Update Who will fill the Fed’s shoes when it tapers QE3? We expect the Fed to start tapering its asset purchases around September 2013 and halt them in H1 2014. Given the large amount of Treasuries – not to mention mortgage-backed securities – the central... 12th June 2013 · 1 min read
Global Markets Update Emerging market currencies to remain under pressure Emerging market currencies have generally been hit hard over the past month, with sentiment further souring in the wake of the latest US FOMC minutes. We think many will remain under pressure this... 10th June 2013 · 1 min read
Global Markets Update What next for the Nikkei? The markets’ honeymoon with the Abe government has ended, but it seems premature to consider filing for divorce. Indeed, the worst of the correction in the Nikkei may soon be over. 5th June 2013 · 1 min read
Global Markets Update Falling "narrow" profit share a warning sign for US equities The first estimate of Q1 US corporate profits published yesterday by the Bureau of Economic Analysis is another warning sign that the second half of 2013 may be much tougher for equities than the... 31st May 2013 · 1 min read
Global Markets Update Is this the start of a sustained rise in bond yields? The recent surges in the yields of US Treasury and Japanese government bonds have led some to ask whether this might be the beginning of a prolonged bear market. Yields should of course rebound to... 29th May 2013 · 1 min read