Global Markets Update New forecasts for bond and stock markets We have revised our projections for the major Western government bond and stock markets, and for emerging markets, partly to reflect changes to our US economic forecasts and partly due to reduced... 14th March 2012 · 1 min read
Global Markets Update A stronger yen likely to undermine Japan’s stock market Japan’s stock market has been on a roll. We do not expect the good times to last. Although we are revising up our end-2012 and end-2013 forecasts for the Nikkei 225 slightly, to 7,750 (versus 7,500... 27th February 2012 · 1 min read
Global Markets Update New forecasts for the yen The yen has fallen to its lowest level against the dollar in more than six months, with the exchange rate now just a whisker below 80. The principal catalysts for the weakening of the currency have... 21st February 2012 · 1 min read
Global Markets Update Has the US equity risk premium reached a peak? Part of the justification provided in some quarters for the recent rise in the US stock market is that equities are attractively valued relative to bonds. We do not dispute this fact – the equity risk... 16th February 2012 · 1 min read
Global Markets Update Gilts unimpressed by £50bn more QE, but outlook still rosy Gilt yields bounced on Thursday after the UK MPC announced a £50bn planned increase in the size of its Asset Purchase Programme (APP) to £325bn. While this presumably reflected disappointment in some... 9th February 2012 · 1 min read
Global Markets Update Too soon to call the end of the bull market in Treasuries Reduced fears of a meltdown in the euro-zone and the recent run of better economic data – culminating in January’s unequivocally strong US payrolls report – have led to speculation that the long bull... 6th February 2012 · 1 min read
Global Markets Update US Treasuries to benefit from more than just Fed policy The relatively subdued response of US Treasuries to the outcome of Wednesday’s FOMC meeting underlines the fact that while monetary policy should provide a firm anchor for long-term yields over the... 26th January 2012 · 1 min read
Global Markets Update A deepening liquidity trap would be bad news for equities Writing in today’s Financial Times, Gavyn Davies argues that “nominal equity returns may be held back by low inflation but in real terms they should outperform government bonds, even if the liquidity... 25th January 2012 · 1 min read
Global Markets Update What next for the euro? The euro fell below $1.27 against the dollar again on Wednesday – close to its lowest level since the autumn of 2010. We do not think its slide is over. Both the relative prospects for monetary policy... 11th January 2012 · 1 min read
Global Markets Update US stock market at risk from the earnings cycle The fourth quarter US corporate earnings season kicks off today. The reporting season is unlikely to be especially upbeat as the profits cycle is now peaking. Looking ahead, the growth rate of profits... 9th January 2012 · 1 min read
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
