Global Markets Update Has the US already begun a “currency war”? The first day of the G20 Summit has been overshadowed by fresh accusations that the US is deliberately engaging in a policy of weakening the dollar and that this is somehow underhand or reprehensible... 11th November 2010 · 1 min read
Global Markets Update Firms' high ROE does not justify a re-rating of US equities US nonfarm, nonfinancial companies have enjoyed a rapid increase in their return on equity (ROE). This does not, however, imply that the stock market is attractively valued. For one thing, the... 11th November 2010 · 1 min read
Global Markets Update Is the tide turning against the euro? The near 20% rise in the euro against the US dollar over the last six months has clearly not sat comfortably with our prediction back in May that the single currency would depreciate further and drop... 10th November 2010 · 1 min read
Global Markets Update QE2 is no panacea for the US stock market The US stock market’s lukewarm reaction to yesterday’s FOMC statement suggests the scale and timing of the Fed’s additional monetary stimulus have been largely, though not completely, discounted. We... 4th November 2010 · 1 min read
Global Markets Update Will QE continue to undermine the dollar? The conventional view that further quantitative easing (QE) is unambiguously negative for the dollar will be tested next week both by the outcome of the Fed meeting and by the decisions of other major... 29th October 2010 · 1 min read
Global Markets Update Oil prices to drop to $60pb in 2011 We continue to expect oil prices to fall back towards $60 per barrel (pb) by the end of next year as the dollar recovers and global demand ultimately disappoints, even though this would take them... 27th October 2010 · 1 min read
Global Markets Update What will the weaker dollar do for US corporate profits? The dollar’s slide is a welcome boost for US companies. A weaker currency not only allows exporters to gain market share and boost their margins, but also benefits those firms selling goods at home... 21st October 2010 · 1 min read
Global Markets Update Commodity super-cycle, or bubble? The recent strength in the prices of industrial metals and oil has revived talk of a “super-cycle” for these commodities where strong demand from emerging economies drives a multi-year bull market. We... 14th October 2010 · 1 min read
Global Markets Update Getting to grips with TIPS The yield on 5-year US Treasury Inflation Protected Securities (TIPS) has tumbled to a record low of minus 0.5%. It could fall even further if the yield on 5-year conventional Treasuries continues to... 13th October 2010 · 1 min read
Global Markets Update Bubble trouble? The prospect of additional quantitative easing (QE) by a number of major central banks in the developed world has coincided with a renewed surge in the prices of risky assets. We are sceptical that... 7th October 2010 · 1 min read
Global Markets Update Just how significant is yen intervention? This month’s intervention by Japan to weaken the yen has contributed to fears of a “global currency war” or, viewed more positively, to hopes that large-scale unsterilised intervention by the major... 30th September 2010 · 1 min read
Global Markets Update A change of view on gold We now expect gold prices to stay high for several more years. Fears of runaway inflation or a dollar collapse, which underpin some of the most bullish forecasts for gold, remain exaggerated... 23rd September 2010 · 1 min read
Global Markets Update What does pay-out policy imply for the US equity market? According to the latest quarterly Flow of Funds Accounts published by the Federal Reserve on Friday, US non-farm non-financial companies (firms hereafter) returned more money to their shareholders in... 20th September 2010 · 1 min read
Global Markets Update The euro’s troubles are far from over The euro’s slide this week has been prompted by renewed concerns about the health of the eurozone’s banking sector. Although the ECB’s willingness to provide ample liquidity should ensure the... 9th September 2010 · 1 min read
Global Markets Update Outperformance of emerging equities looks here to stay The performance of emerging market (EM) equities in 2010 has been disappointing relative to last year but has still been better than the performance of developed market equities. The MSCI Emerging... 2nd September 2010 · 1 min read