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Our forecast that the prices of many natural resources will edge a little higher over the next couple of years suggests that the downside for commodity currencies will be limited even after the Fed begins to raise interest rates. … Commodity currencies …
28th October 2015
This report is only available as a PDF. Click to download. … Why commodity investors need not fear the Fed …
27th October 2015
Equities are likely to suffer in the event of yet another damaging stand-off over the US federal debt ceiling. However, a resurgence in safe-haven demand and expectations that the Fed would wait even longer before raising rates may be positive for …
26th October 2015
This report is only available as a PDF. Click to download. … Outperformance of EM equities set to continue …
Attractive valuations, loose global monetary conditions and a recovery in China should support further gains in emerging market equities. Indeed, we continue to expect the MSCI Emerging Markets Index to outperform the MSCI World Index of developed markets …
This report is only available as a PDF. Click to download. … Rebound in the New Zealand dollar likely to prove short-lived …
23rd October 2015
EM financial markets have rebounded from the summer turmoil as China’s economy has shown signs of stabilisation and Fed lift-off has been delayed. Equities have risen about 5% on average since the end of August, while EM bond indices have returned 1-2%. … …
22nd October 2015
Four frontier markets are due to hold national elections in the coming month. The most high-profile election is in Argentina where Daniel Scioli, the candidate of the ruling left-wing coalition, appears on course to win the country’s presidency. With the …
This report is only available as a PDF. Click to download. … We expect the euro to fall further against the dollar …
We think the future for most emerging markets is brighter than generally believed. Their poor performance has been a function of close ties with troubled China, heavy reliance on exports of commodities that China consumes, and perceived vulnerability to …
21st October 2015
This report is only available as a PDF. Click to download. … Euro-zone equities to benefit from renewed euro weakness …
This report is only available as a PDF. Click to download. … Would Fed tightening cause equities to stumble? …
20th October 2015
This report is only available as a PDF. Click to download. … Risks to commodity prices shifting to the upside …
19th October 2015
This report is only available as a PDF. Click to download. … What would more QE from the ECB do for German Bunds? …
16th October 2015
This report is only available as a PDF. Click to download. … Is sterling set for a fall? …
15th October 2015
This report is only available as a PDF. Click to download. … What next for German Bunds? …
14th October 2015
We expect the Bank of Canada to hold its policy rate at 0.50% next week and retain its neutral stance on the rate outlook. The incoming data indicate that third-quarter GDP growth was stronger than the Bank initially expected. But the uncertain global …
13th October 2015
This report is only available as a PDF. Click to download. … Treasuries remain vulnerable to a recalibration of rate expectations …
This report is only available as a PDF. Click to download. … Oil prices to climb further (even without Syria risks) …
12th October 2015
The Peterson Institute for International Economics (PIIE) is likely to update its estimates of fundamental equilibrium exchange rates (FEERs) next month. We suspect that these will show that the New Zealand dollar is no longer overvalued against the US …
9th October 2015
This report is only available as a PDF. Click to download. … Is this the turn for commodities? …
The Peterson Institute for International Economics (PIIE) is likely to publish its latest semi-annual estimates of fundamental equilibrium exchange rates (FEERs) next month. We suspect that these will show that only a few currencies in its sample remain …
This report is only available as a PDF. Click to download. … Does the increase in credit spreads presage an economic slowdown? …
8th October 2015
This report is only available as a PDF. Click to download. … Which currencies are still fundamentally overvalued? …
7th October 2015
This report is only available as a PDF. Click to download. … Why isn’t gold doing even better? …
6th October 2015
The federal funds rate is now expected to rise to less than 3% in a decade’s time, judging by the risk-neutral US Treasury yield curve. This rate remains well below the average projection of FOMC participants of the “longer run” level of the federal funds …
This report is only available as a PDF. Click to download. … Japan equities set to benefit from further BoJ easing …
5th October 2015
China appears to hold a larger than average share of its fx reserves in US dollars, UK pounds and Australian dollars at the expense of euros and the Japanese yen. This is the conclusion we have tentatively reached on the basis of the latest currency …
2nd October 2015
This report is only available as a PDF. Click to download. … Weak US labour data add to uncertainty in global markets …
The disappointing US jobs report for September will clearly do little to improve investor confidence in the global economy. Yes, it will probably delay the first interest rate hike from the Fed until early next year. However, our view remains that the …
This report is only available as a PDF. Click to download. … Is China experiencing a hard landing? …
1st October 2015
The progress on structural reforms made by many emerging market economies over the past year bodes well for the performance of their stock markets over the long run. And although other factors are likely to exert a greater influence in the short run, …
30th September 2015
This report is only available as a PDF. Click to download. … Glencore’s problems may mark trough for commodity prices …
We do not expect the stripped spread of the JP Morgan EMBI Global Index to rise much further. But with US Treasury yields likely to increase substantially in the months ahead, we think the overall yield of the EMBI Global, which at 6.7% is already the …
29th September 2015
While the emissions scandal has been responsible for the recent plunge in the share price of Volkswagen Group, the bigger picture is that the share prices of German car manufacturers have been sliding since the spring amid growing concerns about demand …
This report is only available as a PDF. Click to download. … What’s behind the slide in the DAX? …
This report is only available as a PDF. Click to download. … We doubt the weakness in Japanese equities will last …
28th September 2015
Uncertainty over the outlook for monetary policy in the US and renewed concerns about the health of China’s economy are weighing heavily on frontier market currencies. The weakest currency has again been the Kazakh tenge , which has fallen by a further …
25th September 2015
This report is only available as a PDF. Click to download. … Why global markets need not fear the Fed …
Fed Chair Janet Yellen used a speech last night to send a pretty clear signal that US interest rates are still likely to be raised later this year, despite the hesitancy last week. This shouldn’t be a surprise, given that 13 of the 17 FOMC officials are …
The rise in sovereign credit spreads in the euro-zone since the spring has partly reflected concerns about the implications of the slowdown in China and US monetary policy, rather than just specific worries about the future of the region. While we expect …
24th September 2015
This report is only available as a PDF. Click to download. … What next for euro-zone sovereign credit spreads? …
This report is only available as a PDF. Click to download. … Which equity markets are most sensitive to China? …
23rd September 2015
Emerging market equities have suffered heavy losses from the recent bout of risk aversion that has been “Made in China”, particularly those in commodity-exporting countries. But with the economy showing glimmers of a cyclical upturn, it may not be long …
A decline in the equilibrium level of the federal funds rate provides some justification for lower long-term US Treasury yields today than on average in the past. But a large decline in the equilibrium level has already been discounted in the bond market. …
22nd September 2015
This report is only available as a PDF. Click to download. … What next for the Brazilian real? …
We think that the sell-off in the Brazilian real has been overdone to some degree. But whereas a decline to around 4/$ in 2003 was subsequently followed by a period of rapid appreciation, several factors suggest that the real will only drift back to …
This report is only available as a PDF. Click to download. … Is the global financial crisis about to enter a third stage? …
21st September 2015
This report is only available as a PDF. Click to download. … Assessing the market fall-out from the Fed’s inaction …
18th September 2015
The FOMC’s decision to leave its target range for the federal funds rate unchanged has triggered a rally in government bonds and weakness in the dollar, which in turn has weighed on equities in the euro-zone and Japan. We don’t expect these trends to …
