Global Markets Update Treasuries – who will fill the void left by the Fed? The Federal Reserve’s second round of quantitative easing (QE2) ends next month. Last November, the FOMC announced that the Fed would purchase an extra $600bn in US government bonds by th middle of... 10th May 2011 · 1 min read
Global Markets Update Profits of doom The growth rate of US domestic corporate profits has outstripped the growth rate of the US economy significantly since the end of the Great Recession. However, corporate profits are now coming under... 9th May 2011 · 1 min read
Global Markets Update Inflation fears to fade as commodity prices slide This week’s sharp falls in commodity prices of all types may have been exaggerated by wild speculation but are mostly consistent with our view of the economic fundamentals. 6th May 2011 · 1 min read
US Economics Update Hard to argue with negative outlook on US AAA credit rating Given the size of the US Federal deficit, which will be close to 10% of GDP this year, and the daunting medium-term fiscal challenges, it is hard to argue with S&P's decision to put a negative outlook... 18th April 2011 · 1 min read
Global Markets Update End of QE2 may not be a big deal for emerging markets The conclusion of the Fed’s second round of Treasury purchases is unlikely to be the major turning point for emerging market equities and bonds that many anticipate. Global financial conditions and... 12th April 2011 · 1 min read
Global Markets Update Silver to follow gold to all-time high The recent surge in the price of silver largely represents catch-up with gold after three years of underperformance. This phase of rapid catch-up is probably now drawing to an end. Nonetheless, the... 11th April 2011 · 1 min read
Global Markets Update What will the end of QE2 mean for Treasuries? The completion of Fed purchases of Treasury securities is only likely to result in sustained increases in their yields if it leads to a reassessment of the outlook for short-term interest rates... 29th March 2011 · 1 min read
Global Markets Update How attractively valued is Japan's equity market? Japan’s equity market bounced back on Tuesday after last week’s sharp sell-off in the wake of the Tohoku earthquake. Although we remain on cautious on the outlook for global equities – our year-end... 22nd March 2011 · 1 min read
Global Markets Update Tokyo calling Finance Ministers from the G7 are due to discuss the economic and market implications of the Japanese earthquake on a conference call beginning at 7am Tokyo time tomorrow. Given the scale of the... 17th March 2011 · 1 min read
Global Markets Update US companies still building up their cash piles The ratio of US non-farm, non-financial companies’ liquid financial assets to their short-term liabilities rose to its highest level in over fifty years in Q4 according to the Federal Reserve’s latest... 14th March 2011 · 1 min read
Global Markets Update How will Japan's disaster affect the rest of the world? The devastation caused by the earthquake and tsunami that struck north-eastern Japan on Friday so far appears to have had remarkably little impact on financial markets in the rest of the world... 14th March 2011 · 1 min read
Global Markets Update Better days should lie ahead for EM equities The underperformance of emerging market (EM) equities relative to developed market (DM) equities is showing little sign of drawing to a close. But we doubt it will last much longer. Admittedly, EM... 8th March 2011 · 1 min read
Global Markets Update Have oil prices already overshot? Another day, another $5 on the cost of a barrel of crude. At this rate it will not be long before prices revisit the highs above $140 seen in 2008. Given the pace at which markets are moving and... 24th February 2011 · 1 min read
Global Markets Update What does the Libyan crisis mean for oil prices? Thus far we have taken a relatively sanguine view of the global economic and market fall-out from the political turmoil in the Middle East and North Africa. The fact that the unrest has spread to... 21st February 2011 · 1 min read
Global Markets Update What should we make of surging share buy-backs? One argument put forward for the rally in the US equity market is that share buy-backs are booming. This argument has its theoretical shortcomings, especially if the share buy-backs are financed with... 14th February 2011 · 1 min read
Global Markets Update Crisis in Egypt could keep food prices higher for longer Much of the coverage of the wider fall-out from the crisis in Egypt has focused on the potential impact on oil prices, but this threat to the global recovery is almost certainly exaggerated. Instead... 2nd February 2011 · 1 min read