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This report is only available as a PDF. Click to download. … Has the tide turned for emerging market equities? …
23rd February 2016
This report is only available as a PDF. Click to download. … Brexit or no Brexit, sterling likely to remain under pressure …
22nd February 2016
The US stock market has made significant gains since hitting a trough on the 11th February. We expect it to make more headway as the news from China improves, and do not think that its prior slide heralds an economic downturn. Admittedly, US recessions …
This report is only available as a PDF. Click to download. … Did the US stock market send a false signal again? …
19th February 2016
This report is only available as a PDF. Click to download. … Will the outcome of the EU Summit give sterling a lasting boost? …
18th February 2016
Although euro-zone peripheral government bonds still appear overvalued even after their poor performance over the past month, we wouldn’t be surprised if their valuations remained quite stretched given the prospects for ECB policy. … Are euro-zone …
We expect oil prices to recover this year and next. This would exert greater upward pressure on inflation in the US than in the euro-zone and encourage the Fed to raise interest rates further while the ECB kept policy loose. This is reflected in our …
Expectations of lower inflation have probably played only a minor role in the fall in Treasury inflation compensation – the gap between the nominal yields of conventional Treasuries and the real yields of Treasury Inflation Protected Securities (TIPS) – …
17th February 2016
This report is only available as a PDF. Click to download. … Will the turnaround in EM equities last? …
This report is only available as a PDF. Click to download. … Output freeze not enough to provide lasting boost to oil prices …
16th February 2016
This report is only available as a PDF. Click to download. … What next for the renminbi? …
15th February 2016
The lack of clarity in China’s data and clumsy communication of policy changes have allowed many scare stories to proliferate. Nonetheless, there is little justification for fears that the renminbi is set for a large devaluation across the board. While we …
Eleven years ago, Alan Greenspan described the behaviour of bond markets as a “conundrum” in testimony to the Senate. This was because long-term yields had trended lower, even as the US FOMC had raised the federal funds rate by 150bp. If that was a …
This report is only available as a PDF. Click to download. … Equities had detached from economic reality …
12th February 2016
We are nudging down our end-2016 forecasts for the euro-zone and UK stock indices in light of the recent market turmoil. Nevertheless, we still expect them to rebound. … We still expect euro-zone and UK equities to …
The medium-term outlook for Argentina’s economy has undoubtedly improved since the election of President Macri, but we see little room for the rally in the bond market to continue. Indeed, with a lot of good news now in the market, bonds could suffer if, …
This report is only available as a PDF. Click to download. … Currency volatility unlikely to trigger a coordinated policy response …
11th February 2016
The surge in the yen against the US dollar has understandably raised expectations of further action to weaken the Japanese currency. We think the Bank of Japan is unlikely to intervene directly in the markets, in part because the latest moves are not …
This report is only available as a PDF. Click to download. … Is the yen likely to rebound even further? …
10th February 2016
Notwithstanding some renewed pressure in recent days, financial markets in the emerging world have held up fairly well in the past month. Indeed, while bonds, equities and currencies have all fallen in commodity-exporting countries, those elsewhere have …
9th February 2016
We are pulling down our forecasts for the S&P 500. Nonetheless, our new projections still imply significant gains from the index’s current level. We are not tempted to throw in the towel and project a much bigger decline in the stock market. The reason is …
This report is only available as a PDF. Click to download. … We still expect the US stock market to recover …
This report is only available as a PDF. Click to download. … Is emerging market debt the ‘third leg’ of the Global Financial Crisis? …
8th February 2016
We have revised down our forecasts for the 10-year US Treasury yield. Nonetheless, our new forecasts still imply that the yield will climb significantly from its current level of 1.8%, as the Fed tightens policy more rapidly than anticipated by the …
This report is only available as a PDF. Click to download. … We still expect Treasury yields to climb, though not as far …
5th February 2016
This report is only available as a PDF. Click to download. … We think Bund yields are likely to drift up, despite more ECB easing …
4th February 2016
The 10-year Japanese government bond yield has fallen to a record low of less than 0.1% following the Bank of Japan’s decision to cut its deposit rate to -0.1%. We now forecast that the 10-year JGB yield will fall to -0.25%, as the BoJ reduces its deposit …
3rd February 2016
This report is only available as a PDF. Click to download. … Are EM equities really pointing to economic meltdown? …
There are signs that the collapse in emerging market (EM) equity prices, spurred by concerns that China’s economy is heading for a hard landing, has gone too far. We believe that China’s economy will perform better than most anticipate this year, leaving …
2nd February 2016
This report is only available as a PDF. Click to download. … Long-term JGB yields – how low will they go? …
We expect the Bank of Japan to reduce its deposit rate much further into negative territory over the course of the next year. (See our Japan Economics service for details.) This reinforces our view that the yen will depreciate against the dollar and that …
The recovery in commodity prices over the last week or so has eased the selling pressure on the dollars of Australia, New Zealand and Canada since the start of the year. However, we wouldn’t be surprised if this proves to be short-lived in the first two …
This report is only available as a PDF. Click to download. … Relief rally for some commodity currencies likely to be short-lived …
1st February 2016
This report is only available as a PDF. Click to download. … The market implications of negative interest rates in Japan …
29th January 2016
We do not think that the global economy is performing as badly as many believe. Indeed, our expectation is that growth in China this year is more likely to edge higher than collapse. With this in mind, we anticipate that the plunges in the prices of many …
28th January 2016
Frontier assets have had a difficult start to the year as fears over global growth caused fresh turmoil in financial markets. Oil producers have been particularly hard hit on the back of the collapse in oil prices, which touched a 13-year low earlier this …
This report is only available as a PDF. Click to download. … Will Russia and OPEC really do a deal to boost oil prices? …
This report is only available as a PDF. Click to download. … Will euro-zone equities continue to underperform? …
27th January 2016
This report is only available as a PDF. Click to download. … Are lower oil prices good or bad? …
26th January 2016
This report is only available as a PDF. Click to download. … Panic over China looks increasingly overdone …
25th January 2016
The recent volatility in global financial markets has had a disproportionate impact on emerging market (EM) assets. Equities have underperformed those in the developed world, dollar-denominated bond yields have risen markedly and currencies have continued …
This report is only available as a PDF. Click to download. … Too soon to sound the all clear? …
22nd January 2016
This report is only available as a PDF. Click to download. … What next for the major currencies? …
21st January 2016
Sterling has been amongst the worst performing major currencies over the last month, falling by a similar amount as the Canadian, Australian and New Zealand dollars, which have all been hit by the latest drop in commodity prices. The weakness in sterling …
In the light of the recent turmoil we are revising our forecasts for Japan’s currency and equity prices. Nonetheless, we continue to expect a combination of better news from China, a partial recovery in the oil price and further easing in monetary policy …
We have reduced the amount by which we forecast the dollar to strengthen against the euro and the yen this year, but increased the amount by which we project that it will appreciate against sterling. The big picture is that our new forecasts continue to …
This report is only available as a PDF. Click to download. … Are the markets ignoring the economics? …
20th January 2016
This report is only available as a PDF. Click to download. … Will sovereign wealth funds heap more misery on the markets? …
19th January 2016
The recent rise in Portuguese government bond yields appears to be largely due to a general increase in risk aversion, rather than factors specifically related to Portugal. However, we think that Portuguese government bond yields (and spreads) could drift …
