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The appreciation of China’s currency against the US dollar this year, while small, has confounded market fears of a substantial devaluation . Nonetheless, even if the PBOC continues to target broad stability on a trade-weighted basis, this would still be …
6th April 2016
This report is only available as a PDF. Click to download. … Too soon to sound the all clear on the renminbi? …
This report is only available as a PDF. Click to download. … What’s behind the rebound in the yen? …
5th April 2016
April may prove to be a crunch month for our view that renewed currency weakness will allow Japanese equities to outperform again. If the yen fails to drop back in response to further monetary easing from the Bank of Japan, the Nikkei is likely to remain …
This report is only available as a PDF. Click to download. … Too soon to give up on a Doha deal to cap oil output …
4th April 2016
The strong performance of emerging market (EM) equities in recent months has left their valuations high according to some measures, such as the price/12month forward earnings ratio. But we do not believe that this marks the end of the rally in EM …
This report is only available as a PDF. Click to download. … Markets start Q2 on a sour note …
1st April 2016
This report is only available as a PDF. Click to download. … Brexit fears still weighing on sterling, despite recent gains …
31st March 2016
Despite the dovish spin put on Janet Yellen’s latest remarks, global markets will probably still have to contend with more Fed tightening this year. However, the prices of many commodities, including gold, should at least benefit from rising inflation …
30th March 2016
This report is only available as a PDF. Click to download. … Commodities may be only lasting winners from Yellen's dovishness …
This report is only available as a PDF. Click to download. … Reassessment of US rate outlook should drag euro back down …
29th March 2016
Fed Chair Janet Yellen’s speech later today will, of course, be keenly watched for hints on the outlook for US interest rates. However, there have already been signs that the markets are reassessing their initially (very) dovish interpretation of the …
This report is only available as a PDF. Click to download. … Shanghai Discord …
24th March 2016
A combination of improving investor sentiment and a pick-up in global commodity prices has underpinned a recovery in frontier financial markets in recent weeks. Since reaching a two-year low in early January, the MSCI Frontier Markets Index has risen by …
Loose monetary policy increases the appeal of “risky” assets. This is a positive thing when their valuations are low, as they were in the aftermath of the financial crisis. It is, however, a potentially dangerous thing when their valuations are high. The …
23rd March 2016
This report is only available as a PDF. Click to download. … Should we be worried about bubbles? …
This report is only available as a PDF. Click to download. … Will the recovery in industrial commodity prices be sustained? …
22nd March 2016
We have revised up our forecasts for the S&P 500 slightly and now project that it will make more headway after recouping all the ground that it lost earlier this year. Nonetheless, we don’t expect the index to power ahead given the advanced stage of the …
This report is only available as a PDF. Click to download. … Taking stock of the rebound in the S&P 500 …
21st March 2016
The gap between the nominal yield of 10-year conventional US Treasuries and the real yield of 10-year US TIPS has rebounded over the past month. This increase in inflation compensation could conceivably reflect other factors as well as higher expected …
18th March 2016
This report is only available as a PDF. Click to download. … Is the G20 trying to steer the dollar lower? …
Speculation that G20 officials came to a tacit deal in Shanghai last month to end the “currency wars” that have boosted the US dollar fits a few of the facts, but overall makes no sense. Neither the Bank of Japan nor the ECB can be happy with the …
FOMC participants’ revisions to their projections for the federal funds rate have boosted Treasuries. But there are three key reasons why we think the rally will be more than reversed in due course. … Post-FOMC rally in Treasuries is likely to be …
17th March 2016
This report is only available as a PDF. Click to download. … Boost to Treasuries from Fed “dovishness” unlikely to last …
This report is only available as a PDF. Click to download. … What is the US Treasury market telling the Fed? …
16th March 2016
This report is only available as a PDF. Click to download. … One eye on the Fed, another on the PBOC …
15th March 2016
The March FOMC meeting is likely to conclude tomorrow with US interest rates left on hold but clear signals that hikes will resume soon. However, the timing will remain dependent both on future US economic data and on global sentiment. For the latter at …
This report is only available as a PDF. Click to download. … Will the 10-year JGB yield become much more negative? …
14th March 2016
This report is only available as a PDF. Click to download. … Will a strong dollar continue to weigh on the US stock market? …
11th March 2016
This report is only available as a PDF. Click to download. … Look to the Fed, not the ECB, to drive the euro a lot lower …
10th March 2016
Since 20th January, the US dollar has depreciated against the vast majority of the currencies in the Federal Reserve’s broad dollar index. As a result, its value on that measure has fallen by more than 3%. Still, we doubt this poor performance sets the …
9th March 2016
This report is only available as a PDF. Click to download. … Will the ECB meet expectations? …
This report is only available as a PDF. Click to download. … On the recoveries in industrial commodities: better early than never? …
8th March 2016
This report is only available as a PDF. Click to download. … What are the risks of another snap sell-off in German Bunds? …
7th March 2016
Brazil’s economy is under the cosh, but the 30% rebound in the Bovespa since mid-January has made it one of the top performing equity markets in the emerging world. While we doubt that the stock market will continue to deliver blockbuster returns, we …
This report is only available as a PDF. Click to download. … What to make of February’s US Employment Report? …
4th March 2016
The real yields of US Treasury Inflation Protected Securities (TIPS) have fallen since the US stock market hit a trough on 11 th February. The likely explanation is that investors have become more worried about the prospects for inflation in light of the …
3rd March 2016
This report is only available as a PDF. Click to download. … What are TIPS telling us? …
The possibility of the UK leaving the EU appears to have had a substantial effect on the value of sterling against the US dollar. Indeed, we think cable would have stayed close to $1.50 had fears of a “Brexit” not grown, rather than slump to below $1.40. …
2nd March 2016
This report is only available as a PDF. Click to download. … EM equities marching on …
Emerging market (EM) equities have performed well in recent days, buoyed by rising commodity prices and an increase in purchases by foreign investors. We remain upbeat and still expect the MSCI Emerging Markets Index to rise by about 25% in 2016/17. … …
This report is only available as a PDF. Click to download. … Comparing US and euro-zone inflation expectations …
1st March 2016
This report is only available as a PDF. Click to download. … Vote for Brexit unlikely to derail global recovery …
29th February 2016
This report is only available as a PDF. Click to download. … Would a Brexit be a White Thursday for the UK stock market? …
26th February 2016
Emerging markets (EM) currencies have enjoyed a renaissance in the past month and, although bumps are likely along the way, we suspect that many will appreciate further against the US dollar over the next couple of years. … Is the pain over for EM …
25th February 2016
This report is only available as a PDF. Click to download. … What might explain fading fears about China? …
Time will tell if the recent rebound in emerging market (EM) equities was a turning point, but we remain cautiously optimistic that they will outperform those in the developed world in 2016/17. … Which EM equity markets are set to …
24th February 2016
We estimate that sterling would rebound from $1.39 to $1.50 against the dollar if the UK voted today to remain a member of the EU. But if a similar move occurs in response to a vote to stay in the club in four months’ time, we suspect it will be …
This report is only available as a PDF. Click to download. … What does the future hold for sterling? …
Political tensions have once again come to the fore in Ukraine, putting the country’s IMF programme at risk. Although the government survived a no confidence vote, the ruling coalition has fallen apart and it remains to be seen if a new coalition can be …
