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The greater inversion of yield curves, in response to the prospect of higher-for-longer interest rates, suggests to us the strength of equities won’t last. To re-cap, yield curves have recently tended to become more inverted on both sides of the Atlantic. …
19th June 2023
We think the Bank of England will hike its policy rate by another 25bp, to 4.75%... (Thu.) …while Turkey’s new central bank governor will kickstart a rapid tightening cycle (Thu.) The euro-zone composite PMI probably ticked down in June but remained above …
16th June 2023
We now suspect growing euphoria over AI will drive the S&P 500 to a significantly higher level than we had previously forecast by the end of next year. In the meantime, though, we still think a mild economic downturn may take some heat out of the stock …
How low Fed and ECB policy rates will go, when they are eventually normalised, is at least as important for financial markets as the precise timings of the ends of tightening cycles, in our view. We think both central banks will cut deeper than investors …
We expect the BoJ to leave its policy settings unchanged on Friday US consumer confidence may have risen in June, but probably remained weak (15.00 BST) Sign up to our Drop-In to digest next Thursday’s BoE meeting here Key Market Themes While the ECB …
15th June 2023
The Fed is likely to “skip” a hike (Wednesday) ECB policymakers will probably raise their policy rates by 25bp (Thursday) We expect the PBOC to lower its 1-year MLF rate from 2.75% to 2.65% (Thursday) Key Market Themes Investors may be right about the …
14th June 2023
We think UK real GDP rose a bit in April (07.00 BST) Euro-zone industrial production probably edged up in April (10.00 BST) We expect the Fed to leave interest rates unchanged (19.00 BST) Key Market Themes The 10-year Gilt yield has continued to march …
13th June 2023
We think an upcoming shift in emerging market monetary policy towards rate cuts will provide long-dated local-currency government bonds there with a bit of a tailwind. But gains may be limited in the coming months if, as we expect, global appetite for …
UK wage growth probably accelerated in April (07.00 BST) We think US core inflation eased to an 18-month low of 5.2% in May… (13.30 BST) … and the headline inflation rate may have fallen to 4.1% (13.30 BST) Key Market Themes Emerging Market (EM) …
12th June 2023
We think US core inflation slowed from 5.5% to 5.2% in May (Tue.) We expect the Fed to leave its policy rate on hold this week, but hike in July (Wed.) ECB will probably deliver another 25bp rate hike but BoJ set to leave policy on hold Key Market Themes …
9th June 2023
While we anticipate that the ECB will deliver more rate hikes this year, we don’t think that this would trigger another leg up in long-term euro-zone government bond yields. In fact, we suspect that yields will fall a bit over the rest of 2023, partly …
8th June 2023
We think Peru’s central bank will leave its policy rate on hold (00.00 BST) Inflation in China was probably very low last month… (02.30 BST) … but we think it remained elevated in Norway (07.00 BST) Key Market Themes After sitting out most of this year’s …
We expect the RBI to keep interest rates on hold on Thursday (05.30 BST) A revision to euro-zone Q1 GDP could show the bloc in a technical recession (10.00 BST) Sign up for our Drop-In to unpack the major June central bank meetings here Key Market …
7th June 2023
A version of this report was published as an opinion piece in the Financial Times on Wednesday 7 th June Signs that newly re-elected Turkish president Erdogan is willing to move away from unorthodox economic policies has led to an increase in investor …
Australia’s central bank hiked rates on Tuesday while policymakers in Poland stood pat We expect the Bank of Canada to raise its policy rate by 25bp to 4.75% (15.00 BST) Trade data from the US and China likely to show a fall in exports in both countries …
6th June 2023
The resolution of the debt ceiling debate has cleared a cloud that was hanging over the US equity market, but we think a darker one – a growth slowdown – still lingers. That’s why we doubt the rest of the year will be particularly positive for the S&P …
We expect the RBA to hike by 25bp (05.30 BST) By contrast, Poland’s central bank will probably leave rates on hold Euro-zone retail sales are likely to have stagnated in April (10.00 BST) Key Market Themes OPEC+ ’s decision over the weekend to cut oil …
5th June 2023
We think May’s ISM Services Index remained broadly consistent with stagnant US GDP (Mon.) We expect policy rate hikes of 25bp from Australia’s central bank, to 4.10%... (Tue.) … and from the Bank of Canada, to 4.75%(Thu.) Key Market Themes Despite the …
2nd June 2023
We think Korea’s inflation fell in May, in line with weaker economic growth (00.00 BST) The US labour market probably loosened further last month (13.30 BST) Watch back today’s Drop-in on the outlook for EM equities on demand here Key Market Themes …
1st June 2023
We don’t think that the recent strong gains in Japan’s equity market mark the start of a significant reversal of its decades-long underperformance; we expect it to lag other markets over the rest of this year in local-currency terms and to perform broadly …
House of Representatives to vote on the Fiscal Responsibility Act late on Wednesday Clients can sign up here for three of our Drop-Ins tomorrow… … these will be focused on euro-zone inflation, OPEC+, and the case for EM equities Key Market Themes While …
31st May 2023
Recent gains in the US stock market have been unusually narrow, and we don’t think the conditions are yet in place for a broad-based rally. A striking fact about the recent gains in US equities is that they have been driven by a remarkably small number of …
“Official” China PMIs may show a further slowdown in the reopening rebound (02.30 BST) We expect Thailand’s central bank to hike by 25bp, to 2.00% (08.00 BST) Canada’s rate of growth probably picked up in Q1 (13.30 BST) Key Market Themes A sense that …
30th May 2023
China’s May PMIs are likely to show the momentum from re-opening fading Euro-zone inflation probably fell in May, but we think the core rate was steady (Thu.) We think US non-farm payrolls increased by 200,000 in May (Fri.) Key Market Themes We expect any …
26th May 2023
We think UK retail sales contracted again last month (07.00 BST) US real consumption and durable goods orders probably picked up in April (13.30 BST) Meanwhile, we think US core PCE inflation rose by another 0.3% m/m (13.30 BST) Key Market Themes Higher …
25th May 2023
President Erdogan looks set to secure victory in the second round of Turkey’s presidential election on 28 th May. This Update sets out how we think this would play out in Turkey’s financial markets this year: in short, we think that measures of Turkey’s …
We think Turkey’s central bank will keep its policy rate at 8.5%... (12.00 BST) … while policymakers in South Africa will deliver a 50bp rate hike, to 8.25% (14.00 BST) Clients can sign up here for tomorrow’s Drop-In on China’s economic outlook Key …
24th May 2023
Perhaps the most remarkable feature of this year’s rally in US equities is just how narrow it has been. We think history suggests that this bodes poorly for the S&P 500’s prospects over the rest of this year. While the S&P 500 has returned ~9% in the year …
We expect the RBNZ to hike interest rates by 25bp, to 5.50% (03.00 BST) We think UK inflation fell from 10.1% in March to 8.0% in April… (07.00 BST) …and clients can sign up here for tomorrow’s Drop-In on UK inflation (10.00 BST) The “higher for longer” …
23rd May 2023
We think the May euro-zone PMI will suggest growth there slowed a bit… (09.00 BST) …while we think the UK PMI changed little from the previous month (09.30 BST) We expect Hungary’s central bank to leave policy unchanged (13.00 BST) Key Market Themes The …
22nd May 2023
We think China’s Loan Prime Rate will be left unchanged (Mon.) We expect the Reserve Bank of New Zealand to raise its policy rate by 25bp, to 5.50% (Wed.) Real consumption in the US probably rebounded a bit in April (Fri.) Key Market Themes We suspect a …
19th May 2023
Although monetary tightening has been a drag on equities over the past year or so, we don’t think the end of rate hikes means the stock market is set for big gains. Rate hikes among developed markets look to be drawing to a close . In particular, we think …
While banking sector strains have become less acute over recent weeks, core money markets remain tense as uncertainty grows around the potential fallout from even a temporary default on US Treasuries. Despite the recent failure of First Republic and …
18th May 2023
We expect Mexico’s central bank to deliver a final 25bp hike, to 11.50% (Thu.) We think inflation in Japan climbed further in May (Fri.) Canada’s retail sales probably fell in March (Fri.) Key Market Themes The S&P 500 has posted solid gains in 2023, but …
Any impact of QT has so far been modest and swamped by the effects of higher policy rates. Asset disposals might put some upward pressure on yields in the euro-zone in the near term, but the process of balance sheet normalisation will be slow and in some …
We think the Philippines’ central bank will pause its tightening cycle… (08.00 BST) …but expect Egypt’s central bank to hike its policy rate by 200bp A number of US data releases tomorrow may show signs of weakness Key Market Themes We think the recent …
17th May 2023
We think Japan’s economy expanded by 0.2% q/q in the first quarter (00.50 BST) Euro-zone data will probably confirm HICP inflation ticked up to 7.0% in April (10.00 BST) Sign up here for a Drop-In to discuss our long-term energy forecasts (15.00 BST) …
16th May 2023
We expect April activity and spending data in China to be flattered by base effects (03.00 BST) The UK labour market probably remained tight by historical standards in March (07.00 BST) US retail sales likely rebounded in April, though real consumption is …
15th May 2023
The PBOC is likely to leave the MLF rate unchanged at 2.75% (Mon) US retail sales probably rose in April, but industrial production may have declined (Tue) We think UK wage growth eased but labour market conditions probably remained tight (Tue) Key …
12th May 2023
Click here to read the full report . This revamped Global Markets Valuations Monitor combines and replaces our previous DM Valuations Monitor and EM Valuations Monito r publications. … Global Markets Valuations Monitor (May …
Sovereign debt risks are back in focus as some frontiers appear to be drifting closer to default. We remain most concerned about default risks in Tunisia and Pakistan, particularly in light of this week’s unrest and IMF deals now appear further away. Debt …
We expect Peru’s central bank to leave its policy rate unchanged (00.00 BST) GDP data may show that UK economy grew slightly in Q1 (07.00 BST) University of Michigan consumer sentiment index probably edged lower in May (15.00 BST) Key Market Themes …
11th May 2023
We don’t think long-dated Treasuries are bound to fare worse than the S&P 500 in the coming weeks, even as the risk of US sovereign default looms larger. Our US Economics Service is the place to look for detail on the evolving debt ceiling spat, which …
We think annual CPI inflation fell further in China in April (02.30 BST) The Bank of England looks set to hike interest rates by another 25bp (12.00 BST) We will be hosting Drop-Ins on Thailand and the BoE tomorrow – sign up here Key Market Themes Despite …
10th May 2023
US core CPI inflation probably fell down to 5.3% y/y in April (13.30 BST) We think the central banks of Poland and Romania will leave rates on hold Sign-up here for our Drop-in on the upcoming elections in Turkey Key Market Themes With credit conditions …
9th May 2023
Fed’s Senior Loan Officer survey likely to show tightening in bank lending standards (Mon.) We expect the downward trend in US core inflation to have resumed in April (Wed.) The Bank of England looks likely to hike interest rates by another 25bp (Thu.) …
5th May 2023
Euro-zone retail sales probably fell again in March (10.00 BST) We think growth in US non-farm payrolls moderated to 180,000 in April (13.30 BST) While in Canada, we expect employment to have risen by 25,000 last month (13.30 BST) Key Market Themes The …
4th May 2023
We forecast small further falls in the yields of long-dated US Treasuries and euro-zone sovereign bonds between now and the end of next year, as disinflation picks up steam and central banks turn more dovish. Investors largely shrugged off this week’s …
Click here to read the full report. We think the economic recovery in China will support further gains in the country’s equity market. Despite some renewed evidence that China’s economy has been recovering more strongly than most anticipated in the first …
3rd May 2023
We expect a final 25bp rate hike from the Fed today, to 5.00-5.25%... (19.00 BST) ...and a 50bp hike from the ECB tomorrow, to 3.50% (13.15 BST) The US trade deficit probably narrowed sharply in March (13.30 BST) Key Market Themes The FOMC looks set to …
