Global Markets Update How much difference will the Fed's rate forecasts make? The US Fed’s decision to start to publish forecasts for its key official interest rate could be another useful policy tool to keep long-term interest rates low, even though that is not the stated... 4th January 2012 · 1 min read
Global Economics Update Two painful lessons for commodity investors from 2011 This year’s sizeable falls in most commodity prices have highlighted two points that have actually been clear for much longer but are still not yet acknowledged by many commentators. First, even if... 20th December 2011 · 1 min read
Global Markets Update 2012 should be another disappointing year for US equities The US stock market is ending 2011 with a whimper. The S&P 500 has fallen so far in December, and is fairly close to our year-end target of 1,200. While we do not expect equity prices to collapse next... 20th December 2011 · 1 min read
Global Markets Update Bond market implications of future economic divergence The US and European business cycles have become highly synchronised in recent decades. But this does not preclude significant economic divergence in response to major structural events. The last of... 6th December 2011 · 1 min read
Global Markets Update The future still looks bright for US Treasuries The sharp drop in the US unemployment rate reported on Friday barely ruffled Treasuries. A few more months of such rosy news on the labour market would probably elicit a less sanguine response in the... 5th December 2011 · 1 min read
Global Markets Update New market forecasts - the fall-out from an EMU break-up We have reviewed our key market forecasts in light of a change to our assumption about the timing of an EMU break-up. The new numbers are presented in the table on the next page. There are four main... 30th November 2011 · 1 min read
Global Markets Update Catch-22 for German Bunds Germany is caught between a rock and a hard place. If she rides to the rescue of her neighbours, she will undermine her own credit standing. If she chooses not to, the euro-zone will probably collapse... 24th November 2011 · 1 min read
Global Markets Update Worse to come for “core” euro-zone bonds? The yields on government bonds issued by France, Austria, Belgium and the Netherlands have risen sharply in recent weeks in a worrying sign that the euro-zone’s debt crisis is starting to rot its... 21st November 2011 · 1 min read
Global Markets Update What to make of Greece’s bigger “haircut” Details have begun to emerge of the revised debt exchange proposed for Greece. The good news is that a larger haircut will make her debt more manageable, all else equal. The bad news is that all else... 16th November 2011 · 1 min read
Global Markets Update Growing stresses in the banking system This week’s surge in Italian government bond yields has catapulted the euro-zone debt crisis into a dangerous new phase. Italy’s problems pose a far greater threat to the region’s banks than those of... 10th November 2011 · 1 min read
Global Markets Update Labour's share of income and the outlook for US equities Labour’s share of income in the US nonfarm business sector hit its lowest level since at least 1947 in Q3 according to data released last Thursday by the Bureau of Labor Statistics (BLS). (See Chart 1... 8th November 2011 · 1 min read
Global Markets Update Renewed yen strength to keep Japan’s stock market weak Intervention by the Japanese authorities to weaken the yen has failed to prop up the country’s ailing stock market. Admittedly, the slide in equity prices has been due to renewed concerns about the... 1st November 2011 · 1 min read
Global Markets Update Chinese whispers alone won't save the euro Despite yet another round of speculation suggesting that China is about to ride to the rescue of the euro-zone, Europe will still have to solve its own problems. Meaningful Chinese support would... 29th October 2011 · 1 min read
Global Markets Update Yen to strengthen to 60 against the dollar The resilience of the yen and a reassessment of the relative strengths of the various pressures on the Japanese currency have prompted us to change the direction of our forecasts. We now expect the... 27th October 2011 · 1 min read
Global Markets Update US corporate earnings and the outlook for the stock market With the US third quarter profits season now underway, two common perceptions are that the growth rate of earnings will remain healthy, and that the value of the stock market in relation to earnings... 18th October 2011 · 1 min read
Global Markets Update US government bonds still fundamentally sound The recent rise in 10-year US Treasury yields has taken them further away from our end-2011 forecast of around 1.5% (at the time of writing they are around 2.15%). But we continue to expect yields to... 14th October 2011 · 1 min read