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This report is only available as a PDF. Click to download. … How will the markets react to the outcome of Greece’s referendum? …
3rd July 2015
Emerging market (EM) currencies were remarkably calm in June despite growing turmoil in the euro-zone. Our synthetic EM exchange rate against the dollar depreciated by 0.5% last month. But the big picture is that EM currencies have already weakened by …
2nd July 2015
This report is only available as a PDF. Click to download. … How might a Grexit affect Greece’s stock market? …
If Greece does abandon the euro, our expectation is that it would not be long before her stock market started to boom. This is tied to our belief that devaluation is essential to revitalise Greece’s economy. … Sterling devaluations & UK equities – …
This report is only available as a PDF. Click to download. … Is the bear market on China’s mainland a threat to other EM equities? …
1st July 2015
This report is only available as a PDF. Click to download. … What would a Grexit mean for US government bonds? …
30th June 2015
The Greek authorities’ decision to call a referendum on the proposals of the country’s creditors triggered a decline of around 20bp in the yield of 10-year Treasuries, which has since been only partly unwound. Nonetheless, in the event that the referendum …
This report is only available as a PDF. Click to download. … How will markets react if the Greek referendum leads to a Grexit? …
29th June 2015
Although some of the initial reaction in the markets to the decision by the Greek authorities to hold a referendum has been unwound, there is plenty of scope for renewed volatility in the event of a near-term Grexit, the risk of which we think probably …
This report is only available as a PDF. Click to download. … Will EM local currency bonds continue to outperform? …
26th June 2015
We expect emerging market (EM) local currency bonds to continue outperforming their hard currencycounterparts over the next eighteen months as EM interest rates remain lower than the marketgenerally anticipates and US Treasury yields rise. Our rate …
This report is only available as a PDF. Click to download. … The euro, not the Greek crisis, is holding back euro-zone equities …
25th June 2015
The growing threat of a Greek exit from the euro-zone has cast a shadow over the outlook for European frontier markets. Admittedly, the reaction in financial markets has so far been muted. And the problems in Greece pose little threat to frontiers …
One reason why Fed tightening may not rattle the US stock market is that the price of equity is currently low compared to that of debt. Our forecast is that the S&P 500 will end next year at 2,200, about 4% higher than its level today, even though we …
24th June 2015
This report is only available as a PDF. Click to download. … What to make of the relative prices of US equities and bonds …
23rd June 2015
This report is only available as a PDF. Click to download. … Recovery in euro probably due to complacency, not carry trades …
22nd June 2015
Despite the crisis in Greece the euro remains near multi-week highs against the dollar. Some have suggested that the euro has actually benefited from the uncertainty, due to the unwinding of short positions linked to “carry trades”. But this rather …
This report is only available as a PDF. Click to download. … Renewed decline in Treasury yields is likely to prove temporary …
19th June 2015
The path of the federal funds rate that is implied by the yields of US Treasuries is much gentler than the one that we project. This leads us to forecast that the 10-year yield will end 2015 higher, even if a Grexit causes it to fall in the near term. …
We have revised up our end-2015 and end-2016 forecasts for the 10-year US Treasury yield by 50bp each, to 3.0% and 3.5%. Our previous forecasts for the yield, which is now around 2.3%, had been based on a view that the term premium would remain …
This report is only available as a PDF. Click to download. … What does the outlook for US interest rates mean for commodities? …
18th June 2015
Fed tightening will probably be more aggressive than the market expects, but we do not expect it to trigger a re-run of the 1994 crash in EM financial markets. … Fed tightening unlikely to trigger a re-run of 1994 EM …
This report is only available as a PDF. Click to download. … A Grexit might not drag euro-zone equities down for long …
17th June 2015
If Greece does default on her sovereign debt, the euro-zone stock market will probably fall further, especially if this is swiftly followed by her abandoning the euro. But even in the event of a “ Grexit ”, we are not convinced the slide would last long. …
This report is only available as a PDF. Click to download. … EM financial markets shrug off concerns about Greece …
16th June 2015
The Greek crisis appears to be coming to a head, but so far at least there has been very little negative impact on emerging market currencies. Should Greece default, and especially if that entails abandoning the euro, this might not last. But the bigger …
This report is only available as a PDF. Click to download. … Contagion from Greek crisis likely to boost gold price further …
15th June 2015
The valuation of the US stock market does not appear as high when quantified with macroeconomic data as it does when a more conventional approach is taken. What’s more, we continue to think that the probability of a major correction is low . … A …
12th June 2015
This note summarises our key calls for the advanced economies and markets, emphasising where we differ from the consensus. Detailed projections (with specific numbers) are available in our regular publications on the respective country and regional …
11th June 2015
This report is only available as a PDF. Click to download. … A snapshot of our views on the US, Europe and Japan …
Emerging market dollar-denominated government bonds have significantly underperformed their local currency counterparts since the end of April. However, this has generally been due to a surge in underlying US Treasury yields rather than increases in …
This report is only available as a PDF. Click to download. … Yen weakness to resume despite Kuroda comments …
10th June 2015
This report is only available as a PDF. Click to download. … What to make of the increase in EM corporate debt …
9th June 2015
Many commentators have speculated that MSCI will add China’s “A-shares” to the MSCI China Index at its Annual Market Classification Review on 9th June. This would boost China’s weighting in its wider indices. However, as we expect any inclusion to be …
8th June 2015
This report is only available as a PDF. Click to download. … Will emerging market equities rebound? …
This report is only available as a PDF. Click to download. … Another strong jobs report tees up the FOMC for a September hike …
5th June 2015
Although the 10-year German Bund yield has risen significantly since late-April, we doubt it will continue to surge given the prospects for ECB policy and the probability of renewed safe-haven flows in the event of a Grexit . On the contrary, we think it …
This report is only available as a PDF. Click to download. … Will the sell-off in Bunds continue? …
4th June 2015
Although the yields of German Bunds have risen significantly since late-April, we doubt they will continue to surge given the prospects for ECB policy and the probability of renewed safe-haven flows in the event of a Grexit . On the contrary, we think …
This report is only available as a PDF. Click to download. … A “Goldilocks” scenario for oil prices? …
3rd June 2015
This report is only available as a PDF. Click to download. … What explains the renewed calm in the Treasury market? …
2nd June 2015
A tenet of the bear case for US equities is that the aggregate profit margin of the US corporate sector is extremely high and that it will inevitably revert to its long-run average, thereby derailing the stock market. This Focus questions the validity …
This report is only available as a PDF. Click to download. … What is the likely fallout from Greece’s negotiations? …
1st June 2015
This report is only available as a PDF. Click to download. … When will profit margins come under pressure? …
29th May 2015
The Peterson Institute for International Economics is due to publish its latest semi-annual estimates of fundamental equilibrium exchange rates soon. These are likely to suggest that the Turkish lira and South African rand are the most overvalued emerging …
28th May 2015
This report is only available as a PDF. Click to download. … Where next for China’s stock markets? …
This report is only available as a PDF. Click to download. … Strong US dollar consistent with relatively strong US economy …
27th May 2015
Diverging prospects for economic growth and monetary policy point to additional gains for the dollar this year, especially against the euro and the yen. The real possibility that Greece will be the first country to leave the single currency is the …
Net foreign purchases of equities are published on a daily basis in five of the eight countries in the MSCI Emerging Markets Asia Index – India, Indonesia, the Philippines, South Korea and Thailand. In aggregate, it looks as if such purchases will be much …
26th May 2015
This report is only available as a PDF. Click to download. … Will the spread of Spain’s sovereign debt remain so low? …
