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In the wake of recent revisions to our end-2011 forecasts for developed market (DM) equities and bonds (see our Global Markets Updates, “How much further could the US stock market fall?” and “Prospects for other major developed stock markets”, published …
12th August 2011
This report is only available as a PDF. Click to download. … Will US Treasury yields drop further? …
All the major developed stock markets have taken a battering in recent weeks. On Tuesday, we revised our long-standing, end-2011 forecast for the US S&P 500 from 1,200 to 1,000. Today, we are lowering our year-end targets for the UK, German and Japanese …
11th August 2011
The yield on 10-year US Treasuries temporarily plunged below 2.1% after Tuesday’s FOMC statement, before rebounding to around 2.25%. The last time the yield was so low was in early 2009 when the S&P 500 was well beneath our new year-end forecast of 1,000. …
This report is only available as a PDF. Click to download. … What next for the US stock market? …
The S&P 500 has now fallen 17% since its high on 21st July, and plummeted through our long-standing end-2011 forecast of 1,200. If the economic slowdown turns into a recession, we think the index could slide to around 850. But for now we think the economy …
10th August 2011
This report is only available as a PDF. Click to download. … ECB’s latest steps unlikely to save the day …
This report is only available as a PDF. Click to download. … Has the rot stopped? …
9th August 2011
The news that S&P finally pulled the trigger by cutting America's long-term credit rating from AAA to AA+ will surely rock the financial markets when they open on Monday. But any spike in Treasury yields and/or fall in the dollar should be relatively …
6th August 2011
This report is only available as a PDF. Click to download. … What next for the yen? …
The 10-year US Treasury yield has fallen very sharply since the end of the second quarter. The principal reason for the drop appears to be a reassessment of the prospects for monetary policy in light of the slowing economy. It has come as a surprise to …
5th August 2011
This report is only available as a PDF. Click to download. … No respite for Spain and Italy …
This report is only available as a PDF. Click to download. … Yen intervention increasingly likely …
4th August 2011
This report is only available as a PDF. Click to download. … US deal won’t avert a debt-rating downgrade …
3rd August 2011
The global financial crisis that began with the banks was only ever temporarily resolved by shifting risks to governments and has now resurfaced in sovereign credit markets. The necessary fiscal tightening will be a drag on developed economies for many …
2nd August 2011
This report is only available as a PDF. Click to download. … AAA-rmageddon out of here... …
The US debt crisis will clearly dominate the agenda in the coming week, so it is worth summarising and expanding on the points we have made so far. In short, we continue to think that the Federal government will be able to avoid a default, but will …
30th July 2011
This report is only available as a PDF. Click to download. … Don't write off the dollar …
The dollar is initially likely to weaken further if the US loses its AAA credit rating. But we would still expect the US currency to rebound and end the year higher against the euro, sterling and yen. … What would a US downgrade mean for the …
29th July 2011
This report is only available as a PDF. Click to download. … Commodities in the calm before the storm …
This report is only available as a PDF. Click to download. … How much more monetary tightening in India? …
28th July 2011
This report is only available as a PDF. Click to download. … How serious would a US sovereign default be? …
27th July 2011
We still think that the US government is unlikely to default on its debt. But if it did, the implications would potentially be far more serious than those that would follow a one or two notch downgrade of its credit rating from the current AAA. … What if …
26th July 2011
This report is only available as a PDF. Click to download. … How long will the respite in the euro-zone last? …
A downgrade of US government debt would not necessarily be disastrous for Treasuries or the dollar, at least once the dust settled. However, it would be the starkest warning yet that the fall-out from the global financial crisis will still be felt for …
23rd July 2011
This report is only available as a PDF. Click to download. … What does China’s weak PMI mean for the renminbi? …
This report is only available as a PDF. Click to download. … Crunch time for euro-zone policymakers …
22nd July 2011
This report is only available as a PDF. Click to download. … Swiss franc may continue to strengthen against the euro …
21st July 2011
Most of the world’s major “paper” currencies have fallen out of favour. But the Swiss franc is an exception to the rule. It has even outperformed gold since the start of the year. We expect the upward pressure on the franc to continue even in the event of …
20th July 2011
This report is only available as a PDF. Click to download. … More signs of China’s reserve diversification? …
This report is only available as a PDF. Click to download. … What upside is left for gold? …
19th July 2011
This report is only available as a PDF. Click to download. … How vulnerable are Treasuries to a US credit rating downgrade? …
16th July 2011
Moody’s has become the second major rating agency to put the long-term credit rating of the US government on review for possible downgrade. We think investors in the Treasury market were right to respond calmly to the news on Wednesday. Despite the risk …
15th July 2011
This report is only available as a PDF. Click to download. … How long will German Bunds remain a safe haven? …
This Focus provides an interim report on the calls that we published at the start of the year. We were right to be cautious on the prospects for the global economy and equity markets and to forecast that US Treasury yields would fall rather than rise. The …
14th July 2011
German Bunds have prospered from the escalating crisis in the euro-zone. Earlier this week, the 10- year yield briefly hit 2.5% – a new low for the year – before edging up again to 2.7% now. Our base case scenario is that political dithering will …
This report is only available as a PDF. Click to download. … Even darker days ahead for the euro-zone …
This report is only available as a PDF. Click to download. … Euro-zone fiscal crisis starts to spread …
13th July 2011
This report is only available as a PDF. Click to download. … Fragile US labour market casts a pall over commodity prices …
12th July 2011
A decline in China's pig population at the turn of the year is now resulting in a surge in pork prices that probably pushed consumer price inflation above 6% y/y last month. Price pressures for non-food items have actually continued to ease, but headline …
9th July 2011
This report is only available as a PDF. Click to download. … China’s rate hike should not lead to a hard landing …
8th July 2011
This report is only available as a PDF. Click to download. … What next for the Australian dollar? …
7th July 2011
This report is only available as a PDF. Click to download. … Markets shrug off end of QE2 …
6th July 2011
This report is only available as a PDF. Click to download. … UK stock market rebound unlikely to last …
This report is only available as a PDF. Click to download. … US economy far from firing on all cylinders …
5th July 2011
This report is only available as a PDF. Click to download. … US stock market rally should prove short-lived …
2nd July 2011
The S&P 500 closed above 1,300 yesterday for the first time since early June and is now about 4% higher than its level at the beginning of the year. There are plenty of optimists who expect the stock market to go from strength to strength. However, we …
1st July 2011
The relative valuations of emerging market equities and bonds are no longer as attractive as they have been in the past. But the fears of overheating and hard landings that have held many back so far this year are generally exaggerated or at least …
This report is only available as a PDF. Click to download. … Many challenges still lie ahead for Greece …
This report is only available as a PDF. Click to download. … Bank roll-over plan no panacea for Greece …
30th June 2011
