Global Markets Update The global fall-out from Middle East tensions The escalation of the conflict between Israel and Hamas has contributed to the recent resilience of oil prices and the fragility of equities. The avoidance of a full-scale ground war in Gaza might... 19th November 2012 · 1 min read
Global Markets Update Will bondholders’ faith in the Fed be rewarded? Bondholders have not lost faith in the Fed’s commitment to low and stable inflation. But that does not mean they should expect healthy returns. 15th November 2012 · 1 min read
Global Markets Update Safe haven demand to support the yen through 2013 Expectations of more aggressive monetary easing from the Bank of Japan have weakened the yen, even though there is already little practical difference between its stance and that of the Fed. On... 15th November 2012 · 1 min read
Global Markets Update Stock market consequences of slower growth in the BRICs Slower growth in the BRIC economies makes it less likely that their stock markets will outperform those of the major developed economies again after a couple of disappointing years. 13th November 2012 · 1 min read
Global Markets Update How are market prospects shaping up after the US elections? The initially limited market reaction to the re-election of President Obama made sense because this was the outcome that had looked most likely. In any event, economic prospects might not have been... 7th November 2012 · 1 min read
Global Markets Update What next for the UK stock market? We expect a weak economy and a partial break-up of EMU to weigh on UK equities through the end of next year – our forecast is that the FTSE 100 will end 2013 around the 5,000 mark. Although we are... 6th November 2012 · 1 min read
Global Markets Update Markets may fear uncertainty more than they like Romney The conventional wisdom is that investors prefer Republican Presidents, but we would suggest that every election is different. Romney’s plans would tax equities more favourably and lighten the burden... 5th November 2012 · 1 min read
Global Markets Update What does the future hold for US Treasuries? Although we think the yield on 10-year Treasuries will fall back soon from almost its highest level in five months, the medium-term prospects for bonds are far from rosy. Indeed, we think the average... 19th October 2012 · 1 min read
Global Markets Update Don't bank on stock market gains once earnings start to fall The US Q2 earnings season kicks off today. The news is likely to be downbeat, with the annual growth rate of profits reportedly expected to be negative for the first time since 2009. In recent months... 9th October 2012 · 1 min read
Global Markets Update Does the ECB have a strong case for buying Spanish bonds? If Spain applied to the EFSF/ESM for a (partial) sovereign bail-out, the path would become clear for the ECB to buy Spanish government bonds under its Outright Monetary Transmissions (OMT) programme... 8th October 2012 · 1 min read
Global Markets Update Euro-zone break-up risk – what’s in the market? Tensions in the euro-zone have recently eased. However, we still anticipate that Greece and one or two other small countries will leave in due course. While we are not alone – a slim majority expects... 25th September 2012 · 1 min read
Global Markets Update How stretched are US stock market valuations? The US Flow of Funds report published yesterday by the Federal Reserve suggests that the stock market remains significantly overvalued by historical standards. We doubt that equities are as far... 21st September 2012 · 1 min read
Global Markets Update China’s smaller savings surplus little threat to Treasuries One popular misconception is that China’s reinvestment of its “surplus” savings has directly depressed long-term US Treasury yields. If this were true, why have yields remained so low in recent years... 6th September 2012 · 1 min read
Global Markets Update Cost control boosts US corporate profits One of the salient features of the US economy since the official end of the Great Recession has been the strength of corporate profits. Nonetheless, we are sceptical that it will last. 30th August 2012 · 1 min read
Global Markets Update Has the US stock market fully discounted QE3? We expect any boost to equity prices from the announcement of a third round of quantitative easing (QE3) by the Fed to be much less significant than those that followed the first two rounds. 29th August 2012 · 1 min read
Global Markets Update The market implications of QE3 The US Fed looks set to launch QE3 soon, but a third injection of the same medicine is unlikely to be anywhere near as effective as the first two in supporting the prices of equities or commodities... 23rd August 2012 · 1 min read