Global Markets Update More downside for yen than upside for Nikkei? The much more ambitious policy stance adopted by the Bank of Japan should keep the yen on a weakening trend, but the scope for a further boost to Japan’s stock market may be limited. 8th April 2013 · 1 min read
Global Markets Update Foreign enthusiasm for Japan starts to fade The two-day meeting of the Bank of Japan’s Policy Board which concludes next Thursday (4th April) will be the first under Haruhiko Kuroda’s leadership. Unfortunately, the markets’ expectations of the... 28th March 2013 · 1 min read
Global Markets Update How long before US corporate profit margins are squeezed? Although the profit share in the US corporate sector is likely to have remained at a very high level in Q4 2012, we continue to expect margins to be squeezed this year. Further gains in the stock... 27th March 2013 · 1 min read
Global Markets Update Too soon to forget about Cyprus The events in Cyprus provide another very visible – albeit extreme – illustration of the financial problems which are holding back the global recovery. Indeed, even though the Cypriot economy itself... 26th March 2013 · 1 min read
Global Markets Update Will there be more contagion from the crisis in Cyprus? The negative reaction in Europe’s financial markets to the decision to "bail in" depositors in Cyprus has been fairly muted so far. Admittedly, the euro fell below $1.30 against the dollar on Monday... 18th March 2013 · 1 min read
Global Markets Update What the Cyprus crisis means for the rest of the world A further escalation of the crisis in tiny Cyprus may have global implications well beyond the immediate market reactions today. It could influence the course of fiscal policy in the UK and monetary... 18th March 2013 · 1 min read
Global Markets Update Is the underperformance of EM equities set to continue? While the recent underperformance of emerging market (EM) equities has been surprising given the strength of developed market (DM) equities, we think it may continue for a while yet. 13th March 2013 · 1 min read
Global Markets Update Has "Dr. Copper" lost his touch? The divergence between the strength of the prices of equities and the weakness of the prices of industrial metals, including copper, does not necessarily tell us anything new about the sustainability... 12th March 2013 · 1 min read
Global Markets Update Is the US stock market as overvalued as Equity Q suggests? Today’s Flow of Funds report published by the Federal Reserve suggests that the stock market is significantly overvalued by historical standards. We think the degree of overvaluation is much less than... 7th March 2013 · 1 min read
Global Markets Update Can the yen still be a safe haven? The yen’s safe haven status has been challenged by expectations of aggressive monetary expansion by the Bank of Japan and the swing in Japan’s trade balance from surplus to deficit. However, even if... 5th March 2013 · 1 min read
Global Markets Update “Abe trade” losing its appeal The partial rebound in the yen and latest wobble in the Nikkei may simply be a pause in the trends of weakness in the Japanese currency and associated strength in equities, which would not be unusual... 27th February 2013 · 1 min read
UK Economics Update What next for sterling? We think the biggest falls in the pound may now be behind us. Granted, Moody’s decision to strip the UK of its AAA rating drove the currency down even further early on Monday. But sterling was fairly... 27th February 2013 · 1 min read
Global Markets Update Is the Fed about to take the punch bowl away? Despite the uncertainty created by the latest FOMC minutes, we do not believe that the Fed will be in any hurry to halt its additional asset purchases completely. Nonetheless, the reaction in the... 21st February 2013 · 1 min read
Global Markets Update Are Gilts vulnerable to a further rise in inflation expectations? The recent rise in UK Gilt yields has been more than accounted for by a surge in breakeven inflation rates. However, we continue to expect long-run inflation expectations, and hence nominal Gilt... 18th February 2013 · 1 min read
Global Markets Update G20 doubles up on familiar messages The fall-out from an extended period of monetary expansion in the US and Japan will continue to ripple around the global financial system, not least in the form of capital flows to emerging markets... 18th February 2013 · 1 min read
Global Markets Update A squeeze on profit margins could weigh on US equities We suspect that cyclical forces will prompt a further rise in workers’ slice of the US economic pie this year, and that the resulting squeeze on profit margins will weigh on the stock market. 14th February 2013 · 1 min read