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This report is only available as a PDF. Click to download. … What to make of the ECB’s dovish stance …
7th March 2019
We have argued before that a limited US-China trade agreement ruling out further tariffs now appears largely priced in to markets. But the chances of a more comprehensive deal, including the roll-back of the tariffs imposed last year, appear to have …
We are more dovish than investors about the outlook for monetary policy in most developed markets. If we are right, “core” government bond yields are likely to fall, or remain very low, this year. … Monetary policy likely to keep “core” bond yields …
6th March 2019
This report is only available as a PDF. Click to download. … What will looser monetary policy mean for Australian assets? …
Smaller stock markets in EM Asia have missed out on most of the big rally in global equities since around the turn of the year. But the characteristics that explain their relative weakness so far in 2019 could prove a source of strength later, if the …
5th March 2019
This report is only available as a PDF. Click to download. … Signs of froth in China’s equity markets …
We don’t think that increases in government bond yields in the US and Germany over the past week will continue throughout 2019. By contrast, we suspect that the rise in the UK is a sign of things to come. … Not all bonds are likely to come …
This report is only available as a PDF. Click to download. … Sell-off in safe-haven assets unlikely to be sustained …
4th March 2019
This report is only available as a PDF. Click to download. … Prospects for Chinese equities still poor despite MSCI decision …
1st March 2019
We have lowered our end-2019 forecast for the 10-year US Treasury yield by 25bp, to 2.25%. This reflects the fact that we no longer expect the FOMC to raise its target for the federal funds rate this year before cutting it by 75bp during the first half of …
This report is only available as a PDF. Click to download. … Risk of a “no-deal” Brexit has not diminished completely …
28th February 2019
Although the Swedish krona rose following stronger-than-expected GDP data on Thursday, we doubt that it will rebound much, as we are more dovish than investors about the outlook for monetary policy. … Swedish krona unlikely to recover much lost …
In his semi-annual testimony to Congress, Jerome Powell reiterated that the Fed is deciding how and when to end its balance sheet rundown. Although some officials have indicated that it could finish as soon as this year, we doubt that this would have a …
The monetary tightening cycles that began last year in many of the large EMs are petering out fairly quickly. But in many of the smaller Frontier markets, interest rate hikes are still at the top of the agenda. … External pressures keep frontiers in …
27th February 2019
This report is only available as a PDF. Click to download. … Dollar’s recent slide unlikely to last …
Although there is no one definitive measure, most evidence suggests that as much as half of last year’s hit to global markets from worries about a US-China trade war has now unwound. Given the type of deal that the two sides are most likely to agree, that …
The S&P 500 has rebounded by more than 11% so far this year in response to a shift in Fed policy and a thawing of the US/China trade war. Nonetheless, a further rally is unlikely given the darkening outlook for the global economy, which should see …
This report is only available as a PDF. Click to download. … Underperformance of Indian equities likely to prove temporary …
26th February 2019
This report is only available as a PDF. Click to download. … More to the surge in the Shanghai Composite than meets the eye …
25th February 2019
This report is only available as a PDF. Click to download. … A trade deal probably wouldn’t stop equities falling this year …
22nd February 2019
We think that the recent rise in the MSCI EM Index, and the particularly strong performance of equities in China and most of the rest of EM Asia, will reverse in the coming months. … EM equities’ strong start to the year not likely to …
This report is only available as a PDF. Click to download. … Safe-haven flows likely to keep Bund yields very low this year …
21st February 2019
We think that safe-haven flows will keep government bond yields across the euro-zone’s “core” low this year. And, we wouldn’t be surprised if yields in Germany even turned negative as they did in 2016, when global growth jitters led to a bout of risk …
This report is only available as a PDF. Click to download. … Gold & S&P 500 unlikely to move in same direction much longer …
20th February 2019
EM equities’ flying start to the year has continued this week, but we are sticking to our view that they will fall over 2019 as a whole, as the darkening outlook for the global economy takes its toll on earnings. … Why we’re sticking to our guns on EM …
This report is only available as a PDF. Click to download. … Monetary policy to push bond yields down in most DMs …
19th February 2019
This report is only available as a PDF. Click to download. … Equities unlikely to keep shrugging off economic weakness …
18th February 2019
This report is only available as a PDF. Click to download. … More weakness in Chinese equities likely as rally stalls …
15th February 2019
In this Focus , we argue that the bright start to 2019 for most EM assets will not last, as growth in both emerging and advanced economies slows markedly in the next couple of years. Within the EM world, though, we think that there will be plenty of …
This report is only available as a PDF. Click to download. … Loose monetary policy unlikely to prop up the stock market …
14th February 2019
This report is only available as a PDF. Click to download. … NZD likely to appreciate further against AUD, but not USD …
13th February 2019
We doubt that German and Swiss government bond yields will drop much further. But if they do fall deep into negative territory, there probably won’t be much that the ECB or the SNB will be willing or able to do. … ECB and SNB unlikely to put a floor under …
Most EM assets have yet to recover from their sharp falls in 2018, meaning that in many cases their valuations are still much lower than they were a year or so ago. But we wouldn’t interpret that as a sign that the rally in EM assets so far in 2019 is …
This report is only available as a PDF. Click to download. … Are the markets mispricing the risk of “no deal” Brexit? …
12th February 2019
This report is only available as a PDF. Click to download. … BTPs probably wouldn’t benefit from even lower Bund yields …
11th February 2019
We think that the recent rebound in emerging market (EM) equities will prove temporary, as concerns about global growth intensify. We expect the healthcare and consumer staple sectors to be more resilient than most, but suspect that other …
This report is only available as a PDF. Click to download. … Euro-zone corporate bonds likely to underperform US peers …
8th February 2019
While the Swiss franc has not benefitted much from recent upheaval in markets, including yesterday’s sell-off in US equities, it has been very stable. We expect this to remain the case in 2019, as slowing global growth and concerns about Italy support the …
This report is only available as a PDF. Click to download. … What to make of sterling’s post-MPC rebound …
7th February 2019
Although the S&P 500 has risen further since the FOMC’s latest meeting, we still expect the index to falter this year even if the Fed shrinks its stock of assets more slowly and by less than previously envisaged. … Less QT wouldn’t save the US stock …
This report is only available as a PDF. Click to download. … Equities likely to falter soon, whatever happens at Trump summits …
6th February 2019
We expect a slowdown in the US and the rest of the world to put renewed pressure on global stock markets this year. If we are right, we suspect that the dollar would get a boost, as it did late last year when equities slumped. … US dollar likely to …
This report is only available as a PDF. Click to download. … Strong US labour market doesn’t preclude a weaker stock market …
5th February 2019
This week’s flurry of EM central bank meetings will probably add to the signs that the shift towards tighter monetary policy in much of the emerging world is nearing an end. Even so, we doubt that the recent broad-based decline in EM local currency …
This report is only available as a PDF. Click to download. … Analysts’ more downbeat S&P 500 EPS forecasts still too upbeat …
4th February 2019
This report is only available as a PDF. Click to download. … Fed may not be done raising rates yet …
1st February 2019
Although we expect the US federal funds rate to end 2020 lower than it is now, we don’t think that the dollar will decline this year. The reason is our bearish view of the global economy. … A dovish Fed won’t keep the US$ down if the S&P …
31st January 2019
This report is only available as a PDF. Click to download. … Post-Fed weakness in the US dollar unlikely to last …
Frontier dollar bonds have rallied this month, due partly to improved risk appetite, but also progress on IMF deals (Ukraine and Sri Lanka) and the political news flow (Venezuela and Lebanon). But it’s unclear to us that the narrowing of spreads will be …
We think that the recent rally in euro-zone equities will run out of steam. Although a trade deal between the US and China could give a boost to global share prices, including in the euro-zone, we think that any increase will be short-lived and …
30th January 2019
