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
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
