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We estimate that US non-farm payroll employment rose by 125,000 in June … (13.30 BST) … and think that wages rose by about 0.3% m/m (13.30 BST) Canada’s employment probably increased by only 10,000 last month (13.30 BST) Key Market Themes We doubt that …
4th July 2019
We think that inflation in Switzerland moved closer to zero in June (07.30 BST) Euro-zone retail sales are unlikely to have rebounded in May (10.00 BST) The National Bank of Romania will probably leave its policy rate at 2.50% (13.00 BST) Key Market …
3rd July 2019
While the real returns from a wide variety of assets were positive in the first half of this year, we don’t expect the good news to last. We project that those from US equities and government bonds, for example, will both be negative in the second half of …
We think that Turkey’s CPI inflation fell sharply last month (08.00 BST) The US ISM non-manufacturing index probably dropped back in June (15.00 BST) The central banks of Sweden and Poland are likely to leave their policy rates unchanged Key Market Themes …
2nd July 2019
European Commission unlikely to recommend formal disciplinary action against Italy We expect the Reserve Bank of Australia to cut its policy rate to 1.00% (05.30 BST) Brazil’s monthly industrial production growth was probably quite weak in May (13.00 BST) …
1st July 2019
China’s Caixin manufacturing PMI probably edged lower in June (Monday) The RBA is likely to cut its policy rate to 1.00% (Tuesday) We estimate that US non-farm payroll employment rose by 125,000 in June (Friday) Key Market Themes Another trade truce at …
28th June 2019
We have long forecast the yen to strengthen to ¥105/$ by the end of 2019, primarily based on our expectation that a sell-off in global equities would boost the demand for safe havens. While we remain of this view, the policy stance of the Bank of Japan …
Frontier financial markets have made gains over the past month, but have generally underperformed their emerging market counterparts. The performance of equity markets has been mixed. And currencies in most cases have only edged up against the dollar. …
27th June 2019
We estimate that Japan’s industrial production increased by 1.8% m/m in May (00.50 BST) Switzerland’s KOF Economic Barometer index probably rose in June (08.00 BST) US personal spending data are likely to point to rising consumption growth (13.30 BST) Key …
While the performance of the US stock market in the Fed’s last four easing cycles was varied, our view remains that it will fall in the next one, which we expect to span from late-summer 2019 to spring 2020. The S&P 500 soared by nearly 15% in the …
Japan’s retail sales values probably rebounded in May (00.50 BST) We think that economic sentiment in the euro-zone remained subdued (10.00 BST) Mexico’s central bank is likely to stand pat for now (19.00 BST) Key Market Themes Unlike most other G10 …
26th June 2019
Fed Chair Jerome Powell due to speak about monetary policy (Tuesday) We expect the RBNZ to stand pat this week, but cut its policy rate later this year (03.00 BST) We think that US durable goods orders fell sharply in June (13.30 BST) Key Market Themes …
25th June 2019
We think that Hungary’s central bank will raise its overnight deposit rate (13.00 BST) US Conference Board consumer confidence index probably fell back in June (15.00 BST) Fed Chair Jerome Powell’s CFR interview might give details about dovish shift …
24th June 2019
This report is only available as a PDF. Click to download. … Market reaction to US-Iran tensions likely to remain contained …
21st June 2019
Although we expect the FOMC to loosen policy substantially by the spring of 2020, we are not forecasting a renewed decline in the 10-year Treasury yield to below 2%. This is because we think that the Committee will cut its target for the federal funds …
This report is only available as a PDF. Click to download. … We don’t expect the rallies in Treasuries, JGBs and Gilts to last …
20th June 2019
This report is only available as a PDF. Click to download. … Investors hoping for unlikely mix of rate cuts and strong earnings …
19th June 2019
Hopes that much looser monetary policy, particularly in the US, will prevent more weakness in the global economy have supported emerging market (EM) assets recently, but we doubt that this will last. … Monetary easing unlikely to drive a sustained …
This report is only available as a PDF. Click to download. … Waning appetite for risk likely to weigh on the euro in 2019 …
18th June 2019
This report is only available as a PDF. Click to download. … What to make of the plunge in Treasury inflation compensation …
17th June 2019
This report is only available as a PDF. Click to download. … Inflation compensation can fall further even if oil stabilises …
14th June 2019
Investors are now even more dovish that we have long been about the outlook for monetary policy in the US. As such, we doubt that Treasury yields will drop further. However, we don’t expect looser monetary policy to avert a drop in global stock markets. … …
This report is only available as a PDF. Click to download. … Protests far from the biggest threat to HK equities …
13th June 2019
Investors seem as pessimistic about the US-China trade war now as they have ever been. Indeed, it would probably come as little surprise to markets if the two sides imposed tariffs on virtually all bilateral goods trade, as we now think is likely. But our …
Donald Trump’s assertion on Twitter yesterday that a “way too high” Fed interest rate was responsible for a “devalued” euro and other currencies against the dollar is wrong, at least when it comes to the ongoing rise of the greenback since the autumn. For …
12th June 2019
This report is only available as a PDF. Click to download. … Bund yields likely to stay low for longer than in 2016 …
Although the US dollar has pulled back over the past fortnight, we expect it to strengthen once more against most major currencies in the second half of this year as the global economy slows. … Recent setback for the US dollar likely to be …
11th June 2019
This report is only available as a PDF. Click to download. … Real yields likely to rebound in the UK, pushing Gilt yields up …
The valuations of EM assets are not particularly low, which is one reason why we expect EM financial markets to suffer along with those elsewhere as the global economy disappoints in the coming quarters. … Valuations don’t make a compelling case for EM …
This report is only available as a PDF. Click to download. … Don’t misread the increase in China’s fx reserves …
10th June 2019
This report is only available as a PDF. Click to download. … Prospect of US rate cuts unlikely to keep S&P 500 rally going …
7th June 2019
We do not think that the valuations of equities are unsustainably high. Nonetheless, we still expect that stock markets in the US and in the rest of the developed world will slump later this year. This is because we anticipate earnings to come under …
This report is only available as a PDF. Click to download. … Monetary policy unlikely to push Bund yields further down …
6th June 2019
This report is only available as a PDF. Click to download. … Rate expectations shouldn’t undermine the dollar …
5th June 2019
This report is only available as a PDF. Click to download. … Gold has not lost its lustre after all …
4th June 2019
We think that corporate credit spreads in the US will continue to climb this year, as the economy there slows. Our forecast is for the spreads of speculative-grade bonds to rise by well over 100bp, on average, by the end of 2019. … US corporate credit …
This report is only available as a PDF. Click to download. … US stock market still an accident waiting to happen …
3rd June 2019
This report is only available as a PDF. Click to download. … DAX, FTSE MIB and Nikkei most exposed to auto tariffs …
31st May 2019
The spread between the yields of 10-year government bonds in Greece and Italy has fallen sharply following the latest European Parliament elections. We now forecast that it will turn negative, reflecting Italy’s comparatively poorer economic prospects, …
Sovereign dollar bond spreads widened much further in frontier markets than in other EMs over the past month on the back of concerns over fragile balance sheets. … Balance sheet fears escalate in frontier …
30th May 2019
This report is only available as a PDF. Click to download. … More upside for government bonds in Canada than elsewhere …
This report is only available as a PDF. Click to download. … Reassessing the rally in Treasuries …
29th May 2019
While it may appear as if the US stock and bond markets are sending mixed signals about the health of the economy, it is common for equity prices to remain high while Treasuries rally in anticipation of looser Fed policy. Nonetheless, the stock market’s …
The relationship between the renminbi and other emerging market currencies has strengthened in recent years. While the response to renewed US-China tensions has been limited so far, if the renminbi depreciates and risk sentiment sours further, we think …
Equities in Japan have underperformed those in other major developed markets since the start of 2018, owing to a stronger yen and weaker corporate earnings in particular. We expect this underperformance to continue over the rest of this year against …
This report is only available as a PDF. Click to download. … What to make of the market reaction to the EU elections …
28th May 2019
This report is only available as a PDF. Click to download. … Safe-haven flows, more than politics, likely to weigh on the euro …
24th May 2019
We think that EM sovereign dollar bonds will generally fare badly in 2019. But their correlations with US equities and Treasuries suggest that they will hold up better in parts of Asia and Latin America. … EM sovereign dollar bonds not all in the same …
The far superior performance of equities in the US than in the rest of the developed world since the global financial crisis (GFC) can be mostly attributed to healthier growth in corporate earnings. It owes little to a shift in their relative valuation. …
The yield of 10-year government bonds in Italy has moved in the opposite direction to the yields of 10-year government bonds in Spain and Portugal recently. While we don’t expect that to continue, we do think that their yields will continue to diverge …
23rd May 2019
