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We think that this week’s sell-off in government bonds sets the tone for the second half of the year. Nonetheless, we don’t expect a further rise in their yields to prompt a major correction in equity prices. … Will rising bond yields continue to weigh on …
30th June 2017
This report is only available as a PDF. Click to download. … Is monetary policy bound to support the ailing US dollar? …
29th June 2017
This report is only available as a PDF. Click to download. … Is the US dollar likely to rebound? …
28th June 2017
MSCI’s latest review of its benchmark equity indices has prompted significant moves in some of the largest frontier stock markets over the past month. Saudi Arabia’s Tadawul has jumped 8% since MSCI said that the country had been added to its “watch list” …
The failure of two Italian regional lenders over the weekend was a reminder of the vulnerabilities still present in parts of the global financial system. However, the big picture is that the system is in its best shape for quite some time. We expect …
This report is only available as a PDF. Click to download. … Strong global growth should underpin financial equities …
27th June 2017
This report is only available as a PDF. Click to download. … Rational exuberance? …
26th June 2017
This report is only available as a PDF. Click to download. … UK FTSE 100 faces at least four obstacles …
23rd June 2017
The bears claim that US equities will hit the skids soon because Shiller’s cyclically-adjusted price/earnings ratio (CAPE) for the S&P Composite is now more than double its average since 1881 of 14. But their claim is based on a misconception that this …
This report is only available as a PDF. Click to download. … Are Treasuries vulnerable to a rebound in inflation expectations? …
22nd June 2017
This report is only available as a PDF. Click to download. … Why are risky assets proving resilient to lower oil prices? …
21st June 2017
We are not surprised that stock markets in China have barely risen in response to MSCI’s decision to include the country’s A-shares in its Emerging Markets (EM) Index. Admittedly, the initial inclusion is a little bigger than MSCI had previously proposed. …
This report is only available as a PDF. Click to download. … What if Chinese A-shares are finally included in the MSCI EM Index? …
20th June 2017
This report is only available as a PDF. Click to download. … How surprising is the combined strength of the Nikkei and yen? …
19th June 2017
Those who claim that the US stock market is bound to hit the skids soon point to the fact that Shiller’s cyclically-adjusted price/earnings ratio is now more than double its long-run average of 14. However, their argument is based on a misconception that …
16th June 2017
This report is only available as a PDF. Click to download. … Why the US stock market is unlikely to come crashing down …
This report is only available as a PDF. Click to download. … Gilt yields likely to rise (a bit) further …
15th June 2017
This report is only available as a PDF. Click to download. … Interest rate divergence should favour EM local currency bonds …
14th June 2017
Emerging market (EM) sovereign and corporate bond yields have fallen steadily so far this year, but we doubt that this will continue for much longer. … How long will the rally in EM bonds …
13th June 2017
This report is only available as a PDF. Click to download. … Will the Fed be worried by trends in the financial markets? …
This report is only available as a PDF. Click to download. … What should we make of the slump in the NASDAQ? …
12th June 2017
Some investors are bound to be feeling nervous after Friday’s near-2.5% drop in the NASDAQ 100, given the rout in technology shares during the bursting of the dot com bubble. However, the technology sector is nowhere near as overvalued now. So it is less …
We doubt that political uncertainty after Thursday’s UK General Election will itself have a big effect on the markets. However, there could be significant moves if the endgame is a Labour-led government. … UK political turmoil doesn’t mean market …
9th June 2017
This report is only available as a PDF. Click to download. … Why have investors shrugged off the UK’s election result? …
This report is only available as a PDF. Click to download. … Investors are probably right to shrug off change to ECB’s guidance …
8th June 2017
While we still think that corporate profits in the US will be squeezed by a tight labour market, we now think that the S&P 500 will tread water this year and next, rather than fall back significantly. Meanwhile, we have also revised our forecast for the …
This report is only available as a PDF. Click to download. … Mayday for markets? …
7th June 2017
China has started to accumulated foreign exchange reserves again in recent months, having reduced them over the past few years. We expect reserves to continue rising, but doubt that this will weigh on the yield of US Treasuries in the same way that it …
This report is only available as a PDF. Click to download. … Would a rebound in China’s reserves weigh on Treasury yields? …
6th June 2017
While we expect the euro to strengthen further over our forecast period, we think that equities in the euro-zone will continue to outperform those in the US, where the economic recovery is more mature. … Will euro strength put euro-zone equities under …
5th June 2017
This report is only available as a PDF. Click to download. … May be not – how will markets react if the Conservatives don’t win? …
This report is only available as a PDF. Click to download. … US Employment Report shouldn’t prevent a June rate hike …
2nd June 2017
Emerging market equities have continued to climb over the past month. Their rise has been partly fuelled by an increase in earnings. Valuations have also picked up, although they still do not look especially high. … How stretched are the valuations of EM …
We have revised up our end-year forecast for the S&P 500, as the index’s surge to above 2,400 since President Trump was elected has left it well above our previous projection. Nonetheless, for now at least, we don’t expect the index to make more headway …
1st June 2017
This report is only available as a PDF. Click to download. … We still think that the best days for the US stock market are over …
This report is only available as a PDF. Click to download. … Will euro strength take the shine off euro-zone equities? …
31st May 2017
This report is only available as a PDF. Click to download. … Gilts are still gloomy about Brexit …
30th May 2017
The latest data suggest that, in aggregate, GDP growth in the largest frontier oil-exporting economies has started to pick up. Kazakhstan’s economy expanded by 3.4% y/y in Q1, the fastest pace of growth since the end of 2014. Meanwhile, the recession in …
26th May 2017
A lot of attention has focussed recently on the possible effect on US government bonds of a reduction in the size of the Fed’s balance sheet. While we expect the reduction to be gradual, we don’t think that it will prevent yields from rising. … US …
This report is only available as a PDF. Click to download. … Opinion polls rattle the sterling bulls …
This report is only available as a PDF. Click to download. … Treasuries vulnerable, even if Fed shrinks its balance sheet slowly …
25th May 2017
This report is only available as a PDF. Click to download. … What does Moody’s downgrade mean for Chinese financial markets? …
24th May 2017
There hasn’t been much action in the Treasury market since yields shot up last November after Donald Trump was elected US president. As is the case for the US stock market, though, low volatility doesn’t necessarily mean that a big correction lies around …
This report is only available as a PDF. Click to download. … We have revised up our forecasts for the euro …
23rd May 2017
There is a view that a big correction in the US stock market lies around the corner, because volatility is very low. This view has been influenced by the fact that volatility was very low before the financial crisis. Yet volatility was even lower in the …
22nd May 2017
This report is only available as a PDF. Click to download. … Low volatility doesn’t always herald a collapse in stock prices …
This report is only available as a PDF. Click to download. … Real trouble for EM currencies? …
19th May 2017
This report is only available as a PDF. Click to download. … Sell-off in EMs unlikely to turn into a widespread rout …
18th May 2017
This report is only available as a PDF. Click to download. … FTSE’s Brexit rally may be nearing its end …
17th May 2017
This report is only available as a PDF. Click to download. … Will US equities and the dollar continue to diverge? …
16th May 2017
