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
Global Markets Update Euro still likely to slide further The dollar’s recovery against the euro may have paused but the outlook for the European single currency remains poor. The relative prospects for monetary policy and the risks of a renewed escalation... 12th October 2011 · 1 min read
Global Markets Update Back to the barber? Given further falls in the prices of Greek government bonds (GGBs), it is little wonder some governments are reportedly seeking to renegotiate the terms of the debt exchange that was proposed for... 30th September 2011 · 1 min read
Global Markets Update Just how safe is the yen? As the euro-zone debt crisis continues to send shockwaves through the financial markets, it is ironic that the best performing of the world’s major currencies so far this year has been the yen. After... 28th September 2011 · 1 min read
Global Markets Update Gold’s remaining pillars still strong Two of the pillars that supported the bull market in gold have recently been knocked away, namely the fears of a surge in inflation and a collapse in the US dollar. However, others remain strong... 27th September 2011 · 1 min read
Global Markets Update Corporate bonds vs. corporate equities US credit spreads have widened significantly since the end of July. However, corporate bonds have outperformed equities during this period – something we expect to continue over our forecast horizon... 22nd September 2011 · 1 min read
Global Markets Update The big picture on emerging market currencies The recent sharp falls in emerging market (EM) currencies against the US dollar do not reflect fundamental shifts in exchange rate policy in these countries. Instead the main driver is renewed demand... 22nd September 2011 · 1 min read
