Global Markets Update A sceptical view on "currency wars" Talk of “currency wars” continues to dominate the headlines despite the efforts of the G7. Indeed, the latest official comments appear to have added to the confusion. This Update summarises the six... 13th February 2013 · 1 min read
Global Markets Update Bank of Japan to continue to lag well behind the Fed The recent slide in the yen against the dollar has mainly been driven by speculation that the Bank of Japan will soon start to loosen monetary policy much more aggressively. However, there is little... 12th February 2013 · 1 min read
Global Markets Update Yen looks set for a correction The yen has already fallen to within touching distance of our mid-year forecast of 95 to the dollar, while the surge in the Nikkei has left it only a little short of our target of 11,600. However... 6th February 2013 · 1 min read
Global Markets Update Phoney “currency wars” could still have real effects The Bank of Japan’s adoption of an explicit 2% inflation target, as called for by the new government, has revived talk of “currency wars”, especially as this new target will be backed up by “open... 23rd January 2013 · 1 min read
Global Markets Update What next for the yen? Despite the hype about “bold moves” and “unlimited easing”, the markets have been underwhelmed by the announcements made by the Bank of Japan today. This muted reaction makes sense, as there was... 22nd January 2013 · 1 min read
Global Markets Update New market forecasts (Jan. 13) We have reviewed our key market forecasts. The new numbers are presented in the table on the next page. While we still expect government bond yields in the major developed economies to remain very low... 15th January 2013 · 1 min read
Global Markets Update Is a bubble forming in emerging market bonds? The yield of the JP Morgan EMBI+ index recently fell to its lowest ever level, prompting claims that a bubble is forming in dollar-denominated emerging market bonds. Although we think the current... 9th January 2013 · 1 min read
Global Markets Update Is a bubble forming in emerging market bonds? The yield of the JP Morgan EMBI+ index recently fell to its lowest ever level, prompting claims that a bubble is forming in dollar-denominated emerging market bonds. Although we think the current... 9th January 2013 · 1 min read
Global Markets Update Softening of Basel liquidity rules not such a big deal The expansion in the range of assets that can be used to meet the new liquidity requirements under Basel III, combined with their slower implementation, is a small positive for the banking sector, but... 7th January 2013 · 1 min read
Global Markets Update Our key calls for 2013 We expect 2013 to be another year of weak growth, low inflation and further divergence between the US and other advanced economies. The biggest problems will continue to be in the euro-zone, where the... 17th December 2012 · 1 min read
Global Markets Update Is the Fed sowing the seeds of the next financial crisis? The Fed’s policy stance may breathe some more life into the US economy in coming years. But it could also sow the seeds of the next financial crisis by inflating new asset bubbles. 13th December 2012 · 1 min read
Global Markets Update The return of the yen carry trade? Expectations that the yen is about to fall sharply could increase the attractiveness of “carry trades” and hence become self-fulfilling. However, with global interest rates likely to remain low and... 4th December 2012 · 1 min read
Global Markets Update How will Basel III affect the demand for gold? There is still widespread confusion and uncertainty over the impact that the Basel III regulations might have on the demand for gold. Gold is an “asset” rather than “capital” and therefore... 28th November 2012 · 1 min read
Global Markets Update Too soon to call the major turn in the yen? Next month’s elections in Japan are unlikely to mark the major shift towards yen weakness that many now anticipate. To be clear, in the next 3-5 years the yen probably will fall sharply. After all... 26th November 2012 · 1 min read
Global Markets Update Are the best days for US corporate bonds behind us? There are signs that the prolonged contraction in US corporate bond spreads may be drawing to a close. If so, the stock market could struggle to make headway. 22nd November 2012 · 1 min read
Global Markets Update What does the future hold for JGBs? A steepening of the yield curve in Japan indicates that investors have become more concerned about the very long-run prospects for bonds. While we think such fears are justified, we doubt they will... 20th November 2012 · 1 min read