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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 …
23rd October 2019
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
Ongoing protests in Chile unlikely to have much of an impact on financial markets UK government spending probably rose in September (09.30 BST) We estimate that retail sales in Canada picked up in August (13.30 BST) Key Market Themes The comparatively …
21st October 2019
UK Parliament’s vote on the new Brexit deal is likely to be very tight (Saturday) No policy changes likely at Draghi’s last meeting as ECB President (Thursday) Central banks in China, Turkey, Indonesia and Russia will probably cut rates Key Market Themes …
18th October 2019
We expect the rally in corporate bonds in the US, UK and euro-zone to unwind a bit in the rest of 2019 as global growth slows further. Next year, we think that corporate bonds in the US and the UK will continue to struggle, but those in the euro-zone will …
China’s industrial production and retail sales probably recovered in September … … but we still think the economy slowed in Q3 as a whole (03.00 BST) Fed Clarida’s speech could shed some light on the probability of an October hike Key Market Themes Stock …
17th October 2019
Though government bond yields have rebounded over the past week, inflation compensation remains near record lows in the US and the euro-zone. In our view, this is unlikely to persist, especially in the US, which is one reason why we expect Treasury bond …
Retail sales in the UK are likely to have fallen again in September (09.30 BST) We estimate that US manufacturing output fell by 0.5% in September … … but industrial production probably declined by less as utilities output jumped Key Market Themes So much …
16th October 2019
The Bank of Korea will probably cut its policy rate by 25bp (02.00 BST) UK inflation is likely to have rebounded a bit last month (09.30 BST) We estimate that US retail sales rose by 0.2% m/m in September (13.30 BST) Key Market Themes We think that …
15th October 2019
The corporate earnings season starting this week in the US could provide the trigger for the drop in the S&P 500 that we forecast to happen this year. Indeed, we think that earnings will disappoint expectations, and doubt that Fed policy or a big …
The UK and EU will try to strike a Brexit deal at a summit ending on Thursday US manufacturing output probably slumped in September We expect the Bank of Korea to cut its policy rate on Wednesday Key Market Themes Equity and bond markets have remained at …
11th October 2019
As the outlook for the global economy continues to worsen, we expect risky assets generally to struggle over coming months and emerging market equities to fall further. East Asian markets are likely to fare worst, in our view, while Indian equities hold …
The yield of 10-year government bonds in Portugal has fallen below that of their counterparts in Spain this week after Portugal’s Socialist Party retained power in Sunday’s legislative elections. While we think that the yield spread will stay low by past …
High-level trade talks between the US & China probably won’t lead to a comprehensive deal The central bank of Peru might cut its policy rate by 25bp, to 2.25% (00.00 BST) We think that consumer confidence in the US improved slightly in October (15.00 BST) …
10th October 2019
Even if US and China reach a partial trade deal this week, we doubt that it will last Account of ECB’s September meeting to highlight divisions among policymakers Latest round of tariffs probably drove US CPI inflation higher (13.30 BST) Key Market Themes …
9th October 2019
We expect appetite for risk and monetary policy to continue to be more important factors than commodity prices in determining the direction of the Aussie, Kiwi and Loonie. With that in mind, we think that the relative resilience of the Loonie so far this …
Fed Chair Jerome Powell might give hints about future path of interest rates Germany’s industrial production probably declined in August (07.00 BST) We think that US producer prices fell a bit last month (13.30 BST) Key Market Themes As the euro-zone …
7th October 2019
As the outlook for the global economy grows gloomier, the US dollar is strengthening towards multi-year highs. We expect it will appreciate further as safe haven demand intensifies over coming months. After rising by 5% in 2018, the US dollar has …
4th October 2019
FOMC minutes for September to shed some light on the Fed’s thinking (Wednesday) The account of the last ECB meeting may show the extent of division in the council (Thursday) US CPI probably jumped, as the latest tariffs on Chinese imports start to bite …
While the hike to Japan’s sales tax means its economy will probably contract in Q4, we suspect that the impact on bonds and equities there will be fairly small. However, we still think that Japan’s stock market will fall by the end of this year, as waning …
3rd October 2019
We don’t expect the valuations of US equities to continue to rise over the rest of 2019. In fact, we expect the price/earnings (P/E) ratio of the S&P 500 to fall, and this is a key reason why we forecast that the index will drop by about 15% from its …
UK services PMI likely to have dropped back in September (09.30 BST) We think that euro-zone retail sales fell again in August (10.00 BST) US ISM non-manufacturing index probably edged down only slightly last month (15.00 BST) Key Market Themes The recent …
2nd October 2019
Switzerland’s CPI inflation probably remained subdued in September (07.30 BST) We expect the policy rate to be cut in Iceland but remain unchanged in Poland US ADP’s measure of private-sector employment likely to be subdued (13.15 BST) Key Market Themes …
1st October 2019
RBA likely to cut its key policy rate by 25bp, to 0.75% (05.30 BST) We think that euro-zone headline inflation fell to about 0.8% in September (10.00 BST) The US ISM manufacturing index probably rebounded this month (15.00 BST) Key Market Themes While …
30th September 2019
The weakest balance sheets in the emerging world are concentrated in the Frontier Markets and, as a result, balance of payments crises occur more regularly. This lies behind Venezuela’s crisis, but also a growing inflation problem in Zimbabwe and (to a …
Chinese PMIs will probably show that the economy remains under pressure (Monday) RBA likely to cut its key policy rate by 25bp, to 0.75% (Tuesday) We expect a subdued 125,000 gain in US non-farm payrolls (Friday) Key Market Themes Euro-zone government …
27th September 2019
Investors’ continued optimism about corporate earnings in the US is hard to square with our view that economic growth there and in the rest of the world will remain weak. That is the key reason why we expect US equities to perform poorly during the rest …
We have revised up our forecasts for India’s Sensex equity index following the corporate tax reform there. And more generally, we expect it to be one of the best performers among EM stock markets over the next few years, even if it falls back a little …
Mexico’s central bank will probably cut rates later on Thursday We think that the euro-zone Economic Sentiment Indicator fell to a 4½-year low (10.00 BST) US personal spending data likely to show another rise in consumption in August (13.30 BST) Key …
26th September 2019
The combination of a broad-based easing cycle in emerging markets and strong demand for risky assets has pushed local currency emerging market (EM) sovereign yields down sharply in 2019. However, we expect that rally to go into reverse by the end of the …
25th September 2019
UK MPs to return to Parliament on Wednesday following Supreme Court ruling We think that the Bank of Thailand will cut its policy rate by 25bp (08.05 BST) But the New Zealand and Czech central banks will probably leave policy unchanged Key Market Themes …
24th September 2019
We think that the German Ifo Business Climate Indicator fell to a near-decade low (09.00 BST) UK Supreme Court to give its ruling on the prorogation of Parliament (10.30 BST) The central banks of Colombia and Hungary will probably leave rates unchanged …
23rd September 2019
Economic sentiment indices for the euro-zone and Germany probably edged up in September We expect the central banks of Mexico, Thailand, the Philippines and Egypt to cut rates Those in New Zealand, Colombia, the Czech Republic and Hungary are likely to …
20th September 2019
The strong performance of US equities this year has continued to be, at least in part, fuelled by expectations that growth in corporate earnings there will be much faster than elsewhere. Nonetheless, given our view that the US economy will slow further in …
Given our view that the US economy will avoid a recession, we doubt that the Fed will deliver as many rate cuts as investors anticipate. As such, we think that Treasury yields will rise substantially next year. To re-cap, the Fed voted this week to cut …
A drop in fresh food prices probably weighed on Japan’s headline CPI inflation (00.50 BST) Canada’s retail sales are likely to have bounced back in July (13.30 BST) We suspect that euro-zone consumer confidence deteriorated in September (15.00 BST) Key …
19th September 2019
Although the oil price has fallen back since the weekend’s attacks on production facilities in Saudi Arabia, it could surge again if there are further strikes or if tensions in the Middle East escalate into a full-blown conflict. In that event, we think …
The Fed is highly likely to deliver a 25bp cut at today’s FOMC meeting We expect Brazil’s central bank to cut its policy rate by 50bp this evening But both the Bank of England and BoJ will probably keep rates on hold Key Market Themes The surge in US …
18th September 2019
We think that Japan’s export values dropped by more than 10% y/y in August (08.50 BST) The FOMC will probably cut rates by 25bp for the second time in a row (19.00 BST) Brazil’s central bank is also likely to lower its main policy rate Key Market Themes …
17th September 2019
FOMC meeting starting on Tuesday widely expected to result in a 25bp rate cut UK-EU Brexit talks set to “intensify”, increasing optimism about a deal We think that US industrial production rebounded by 0.2% m/m in August (14.15 BST) Key Market Themes …
16th September 2019
Cyclical headwinds to activity and spending in China may have abated slightly (Mon) US industrial production probably rebounded by about 0.2% m/m in August (Tue) Fed highly likely to cut rates again, but we think that the BoJ and BoE will stand pat Key …
13th September 2019
Despite what Mr Trump’s tweet yesterday appears to suggest, we don’t think that the ECB is “trying, and succeeding, in depreciating the Euro”. And although we expect the euro to weaken further against the dollar this year, we think that appetite for risk, …
Peru’s central bank is likely to cut its policy rate later today Euro-zone pay growth probably picked up in Q2, but we doubt it will last (10.00 BST) We suspect that US retail sales rose only slightly in August (13.30 BST) Key Market Themes Although the …
12th September 2019
The valuations of EM assets have fallen significantly from their peaks in this cycle around the start of last year, but remain above their averages since the Global Financial Crisis (GFC). In our view, they could easily fall further if the global economy …
Italian assets have rallied since a new ruling coalition between the Five Star Movement (M5S) and the Democratic Party (PD) was formed. While we have revised our forecasts to reflect the reduced political risk associated with the new government, we still …
11th September 2019
The central bank of Poland is likely to stand pat, and strike a more hawkish tone Mexico’s industrial production probably edged down in July (12.00 BST) We think that both headline and core producer price inflation picked up in the US (13.30 BST) Key …
10th September 2019
UK MPs are likely to vote against PM Johnson’s second bid for a general election this evening Climbing food prices probably pushed China’s inflation higher in August (02.30 BST) We think that core inflation in Norway and Sweden edged up last month Key …
9th September 2019
UK MPs are likely to vote against PM Johnson’s second bid for a general election (Monday) We expect the ECB to cut deposit rate by 10bp and reinforce forward guidance (Thursday) US retail sales probably increased slightly in August (Friday) Key Market …
6th September 2019
Although we are revising down our once-bullish forecast for the 10-year US Treasury yield, we think that it has fallen too far and will rebound to 1.75% by the end of 2019 and rise significantly next year. Since early October 2018, the yield has fallen …
Germany’s industrial production is likely to have fallen further in July (07.00 BST) Russia’s central bank will probably cut its deposit rate by 25bp (11.30 BST) We estimate that US non-farm payrolls increased by 110,000 last month (13.30 BST) Key Market …
5th September 2019
