Global Markets Update Recent weakness in gold price unlikely to be sustained The price of gold has fallen in recent weeks as reduced safe haven demand has more than offset the increase in inflation fears associated with the rises in some other commodity prices and the renewed... 26th January 2011 · 1 min read
Global Markets Update Our big calls for 2011 (and beyond) We expect 2011 to be a year of generally disappointing growth but also fading fears of inflation in the developed economies, with lower industrial commodity prices and a stronger US dollar against... 13th January 2011 · 1 min read
Global Markets Update Gilts should have a better second half of the year Gilts have had a rough ride over the past couple of months in common with the government bonds of other major economies. Things are unlikely to improve for a while – we think the 10-year yield will... 12th January 2011 · 1 min read
Global Markets Update "Currency war" still phoney but China tensions spreading The Brazilian government’s accusations that the US is engaged in a “currency war” are always good for a headline but continue to have little foundation. China’s manipulation of the renminbi remains a... 10th January 2011 · 1 min read
Global Markets Update Can China save the euro? Despite some hopes to the contrary, China is unlikely to be able or willing to do much to solve the debt crisis in the euro-zone. China was presumably already buying a significant amount of peripheral... 6th January 2011 · 1 min read
Global Markets Update How useful is nominal GDP as a guide to bond yields? One approach to forecasting long-term government bond yields is to assume that they should normally match the rate of growth of nominal GDP. For example, this approach is currently being used by some... 4th January 2011 · 1 min read
Global Markets Update Gold price forecast raised to $2,000 The improvement in the near term prospects for the global economy has prompted us raise our end- 2011 price forecasts for industrial commodities. However, our new forecasts of $75 per barrel for oil... 20th December 2010 · 1 min read
Global Markets Update Chinese demand won't support commodity prices for ever Based on a plausible scenario for the evolution of the sustainable growth rate of the economy and the commodity-intensity of activity, China’s commodity demand in 2025 could be half the level that a... 15th December 2010 · 1 min read
Global Markets Update 2011 looks less promising for the US equity market The US equity market is ending the year with a flourish. The S&P 500 has risen by about 5% so far in December, and is not far shy of our year-end target of 1250. Nonetheless, we are sceptical the... 14th December 2010 · 1 min read
Global Markets Update Is this is the beginning of the end for low US yields? We do not believe that the recent jump in Treasury yields marks the start of a prolonged bear market. Provided, as we expect, the economic recovery ultimately disappoints and the Fed keeps short-term... 13th December 2010 · 1 min read
Global Markets Update Are Treasuries overvalued compared to US equities? Aside from this week’s fiscal stimulus proposals, one explanation being provided for the sell-off in US government bonds is that they look expensive relative to US equities. We agree, but we don’t... 9th December 2010 · 1 min read
Global Markets Update Market implications of more US fiscal stimulus The unexpected scale of the fiscal stimulus agreed by the Obama administration and Republican leaders has caught the markets off guard. We think the rally in the dollar makes sense, and that investors... 8th December 2010 · 1 min read
Global Markets Update Will common euro-zone bond issuance see the light of day? The establishment of a market for euro-zone government bonds that are guaranteed by all Member States is seen by some as an important contribution to a resolution of the region’s fiscal crisis. We are... 7th December 2010 · 1 min read
Global Markets Update Should the world care about Ireland? The significance of the crisis in Ireland and the problems in other economies on the fringes of Europe is potentially far wider than their small size would suggest. The exposure of global financial... 23rd November 2010 · 1 min read
Global Markets Update Yen to fall further against the dollar We expect the Japanese yen to weaken further against the US dollar, to 90 next year and 100 in 2012 (from around 83 today), despite a steady grind higher in most other Asian currencies. In contrast to... 18th November 2010 · 1 min read
Global Markets Update Is the Fed's QE2 already high and dry? The fact that Treasury yields have risen rather than fallen since the Fed announced the launch of QE2 is not necessarily evidence that the policy is failing, especially when the US central bank has... 15th November 2010 · 1 min read