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Polls point to a Conservative win at the UK general election, but a majority is not a done deal Fed, ECB and SNB likely to keep their policy rates unchanged … … but central banks in Turkey and Russia will probably cut theirs Key Market Themes With …
6th December 2019
A surprise win for Labour at Thursday’s election could be a major shock to UK equity markets. There are few recent examples of an unexpected sharp left-ward political turn in a developed economy. But there are some historical precedents that help put a …
German industrial production probably stabilised in October (07.00 GMT) We forecast that US non-farm payrolls increased by 170,000 last month (13.30 GMT) US consumer confidence index likely to have remained at high level (15.00 GMT) Key Market Themes …
5th December 2019
Given our pessimistic view of China’s economy and the trade war, we think that the underperformance of developed market (DM) companies exposed to China will continue. Admittedly, the MSCI index that tracks those firms has actually done pretty well this …
4th December 2019
Spanish and Italian composite PMIs probably fell below 50 in November (08.15/08.45 GMT) We think that the US ISM non-manufacturing index rose a bit last month (15.00 GMT) Chile’s central bank likely to cut its policy rate by 25bp, to 1.50% (21.00 GMT) Key …
3rd December 2019
The RBA will probably keep rates unchanged, but we expect cuts next year (03.30 GMT) We forecast that South Africa’s GDP contracted in Q3 (09.30 GMT) … … but that Brazil’s GDP increased strongly (11.00 GMT) Key Market Themes While its new leadership will …
2nd December 2019
Despite President Trump’s frequent complaints about the strength of the dollar, its valuation is not especially high in our view and is unlikely to prevent it from rising further in the next couple of years. Admittedly, the US currency has risen a long …
Japan’s industrial production probably fell after the tax hike in October (Thu., 23.50 GMT) We think that GDP contracted in Sweden while growth slowed in Finland and Denmark in Q3 Euro-zone inflation is likely to have risen in November (Fri., 10.00 GMT) …
28th November 2019
Ecuador this month joined the handful of frontier economies where sovereign dollar bonds are trading at levels commonly associated with default. (See Chart 1.) But with the IMF likely to stand by the government, we think that default fears are overdone …
Although we think that the Fed is now done cutting rates, we think that more easing is coming outside the US and that major central banks will remain net buyers of bonds. With this in mind, we forecast that government bond yields in most developed …
ESI likely to remain consistent with weak growth in the euro-zone (10.00 GMT) Retail sales in Japan probably plunged following October’s sales tax hike (23.50 GMT) We think that Switzerland’s economy contracted in Q3 (06.45 GMT) Key Market Themes We don’t …
27th November 2019
US Q3 GDP growth will probably be confirmed at 1.9% q/q annualised (13.30 GMT) US durable goods and income & spending reports for October are due … … and are likely to reiterate that underlying domestic demand growth has continued to slow Key Market …
26th November 2019
RBA Governor Lowe’s speech could shed some light on the likelihood of QE in Australia We think that consumer confidence picked up in the US in November (15.00 GMT) A rise in inflation is likely to force Nigeria’s central bank to stand pat Key Market …
25th November 2019
We doubt that the global pick-up in government bond yields will resume anytime soon, so domestic monetary policy is likely to be the key driver of bonds in Switzerland and the Nordics. With that in mind, while we think that bond yields in Norway will not …
The Labour Party’s manifesto contains several measures which, if implemented, would have a significant negative effect on UK equites. A surprise Labour win could send UK equities tumbling, despite a softer Brexit. Labour’s manifesto is one of the most …
22nd November 2019
UK Conservative party to release its manifesto for the December general election US durable goods data for October were probably affected by the GM strike (Wednesday) We think that Japan’s retail sales plunged in October following the sales tax hike …
Despite the sales tax hike, inflation in Japan is likely to have risen only slightly (23.30 GMT) PMIs in the US and the euro-zone probably edged up in November … … but we think that they remain consistent with weak GDP growth in both countries Key Market …
21st November 2019
Fed minutes will probably reiterate that further rate cuts are unlikely (19.00 GMT) UK public finances may have improved since September (09.30 GMT) We think that euro-zone consumer confidence picked up in November (15.00 GMT) Key Market Themes Although …
20th November 2019
US Treasury yields have rebounded over the past few weeks, as worries about the US-China trade war and the outlook for the global economy have eased somewhat. But while we don’t expect them to revisit their lows, we also think that Treasury yields are …
Japan’s imports probably fell sharply after the October tax hike (Tue., 23.50 GMT) We think that China’s 1-year Loan Prime Rate edged down last month (Wed., 01.30 GMT) Fed minutes might reveal extent of support for a pause in rate cuts (Wed., 19.00 GMT) …
19th November 2019
Optimism about trade has been a factor behind the rally in global equities in the past month. But with a “mini-deal” now largely discounted in the markets, and economic growth unlikely to do better than stagnate over the next couple of years, we suspect …
US housing starts probably rebounded strongly in October (08.30 GMT) Hungary’s central bank likely to keep interest rates on hold (13.00 GMT) We think that Canada’s manufacturing sales were unchanged in September (13.30 GMT) Key Market Themes With the …
18th November 2019
Japan’s imports may have fallen sharply due to the sales tax hike (Tuesday) We think that China’s loan prime rate will be cut by 5bp (Wednesday) Fed minutes will probably reiterate that further easing is unlikely (Wednesday) Key Market Themes Although the …
15th November 2019
Although volatility in the US stock market is expected to remain very low, we don’t think that this is a worrying sign that investors are being complacent. That is because big stock market corrections are usually the cause , rather than the symptom, of an …
Unlike the consensus, we think that Japan’s GDP growth accelerated in Q3 (23.50 GMT) Spending and activity in China probably held up well in October (02.00 GMT) Policy rates in Egypt and Mexico are likely to be cut Key Market Themes While the US dollar …
13th November 2019
EM equities have continued to rise over the past month, seemingly driven by optimism about an imminent US/China trade deal and some improvement in the economic data. But we are sceptical that the rally will last, and forecast that EM equities will tread …
Unlike the consensus, we doubt that the RBNZ will cut rates (01.00 GMT) We think that euro-zone industrial production rose a bit in September (10.00 GMT) Fed Chair Powell due to testify to the Joint Economic Committee of Congress (11.00 GMT) Key Market …
12th November 2019
President Trump’s speech may provide news on trade negotiations (17.00 GMT) Weaker UK labour market figures would make an early rate cut more likely (09.30 GMT) Norway’s economy probably continued to outperform in Q3 (07.00 GMT) Key Market Themes In spite …
11th November 2019
The loss of the South African government’s final investment grade credit rating is already largely priced in, but there are still reasons to be downbeat on the country’s government bonds, and the rand . Concerns about the South African government’s large …
China spending and activity probably held up well in October (Thursday) We think that Germany’s economy narrowly avoided a recession in Q3 (Thursday) Rates cuts likely in Mexico and Egypt (Thursday) Key Market Themes Until President Trump ’s negative …
8th November 2019
If the Conservative Party wins an outright majority in the upcoming general election on 12 th December, as polls suggest is the most likely outcome, there is potentially significant upside for UK equities. Since the 2016 referendum, UK mid- and large-cap …
China’s exports are likely to have continued to contract last month We forecast that employment in Australia fell by 10,000 in October (13.30 GMT) US index of consumer confidence was probably little changed in November (15.00 GMT) Key Market Themes …
7th November 2019
Polls suggest that the general election in Spain this weekend will not end the political deadlock there. That is the key reason why, despite brighter growth prospects, we doubt that bonds and equities in Spain will do better than those elsewhere in the …
Against a backdrop of stubbornly-low inflation and rising unemployment, we now think that the RBA will launch quantitative easing (QE) in 2020. Here, we consider the implications for Australia’s assets. Assessments of the impact of QE elsewhere are not …
Central banks of Thailand and Iceland both likely to cut rates by 25bp Spanish and Italian PMIs probably dropped last month We think that euro-zone retail sales fell in September (10.00 GMT) Key Market Themes Optimism about a trade deal between the US and …
5th November 2019
We expect a small rebound in the US ISM non-manufacturing index (Tue.) The central bank of Iceland is likely to cut its policy rate for the 5 th time this year (Tue.) … … while the Bank of England will probably stand pat for now (Thu.) Key Market Themes …
1st November 2019
The Riksbank appears determined to raise interest rates into an economic slowdown. While higher policy rates may provide some support for the Swedish krona, we still think that it will continue to depreciate. To the surprise of most analysts, ourselves …
We have revised up our end-2019 forecasts for equities, which previously pointed to a large correction. But even without this big pothole, we continue to think that the road ahead for them will be bumpy. Admittedly, we had underestimated the extent to …
31st October 2019
China’s Caixin manufacturing PMI probably dropped back in October (01.45 GMT) Inflation in Switzerland may have turned negative (07.30 GMT) We suspect that non-farm payrolls increased by just 25,000 due to the GM strike (12.30 GMT) Key Market Themes We …
The spotlight has shifted back onto weak sovereign debt positions in Frontier Markets this month after the election of a left-wing president in Argentina and growing political instability in Lebanon. As we see it, debt write-downs are the only way out for …
The Fed will probably cut interest rates by a further 25bp (Wednesday, 19.00 GMT) We think that the Bank of Japan will leave rates unchanged after its policy review (Thursday) China’s PMIs are likely to have dropped a bit in October (Thursday, 01.00 GMT) …
30th October 2019
The yield of 10-year government bonds in Greece is now only slightly above that of 10-year government bonds in Italy. Given Italy’s comparatively poor growth and debt dynamics and greater political risk, we think that it is only a matter of time before …
We think that US GDP slowed to 1.5% annualised in Q3 (12.30 BST) Bank of Canada is likely to keep rates on hold, but cut its growth forecasts (14.00 BST) Another 25bp rate cut by the Fed is widely expected (18.00 BST) Key Market Themes The 10-year US …
29th October 2019
UK PM Boris Johnson will probably agree to delay Brexit until 31 st January at the latest … … and might get Parliament’s approval for a general election in early-December US consumer confidence probably rebounded in October (14.00 GMT) Key Market Themes …
28th October 2019
EU leaders to discuss whether to grant a delay to Brexit and, if so, for how long Germany’s IfO Business Climate Index (BCI) probably fell slightly in October (09.00 BST) Central Bank of Russia likely to cut its policy rate by 50bp, to 6.50% (11.30 BST) …
24th October 2019
Equities in the euro-zone have outperformed those in the US since early October. While we expect this trend to continue, we think that both will fall in the rest of this year, as global growth slows further. While both the MSCI EMU Index and the MSCI USA …
We expect central banks in Indonesia and Turkey to cut their policy rates Internal divisions will remain the focus at Draghi’s last ECB meeting GM strike probably took a toll on US durable goods orders in September (13.30 BST) Key Market Themes Higher …
23rd October 2019
We think that the recent weakness in emerging market (EM) currencies will continue during the rest of 2019, as a weaker global economy triggers a fresh bout of risk aversion. In 2020, we think that the renminbi and the currencies of other Asian EMs with …
While we think that there is still a bit more scope for the Norwegian krone to fall against the euro, we expect the currency to bounce back over the next couple of years, as the country’s terms of trade improve. For all the talk about krone weakness, its …
UK Parliament scheduled to vote on Withdrawal Agreement Bill (Tuesday, 19.00 BST) Euro-zone consumer confidence probably worsened in October (Wednesday, 15.00 BST) Central bank of Chile likely to cut its policy rate by 25bp (Wednesday, 22.00 BST) Key …
22nd October 2019
