Asset Allocation S&P 500’s valuation points to mediocre long-term returns US equities have plunged this year, but the S&P 500’s valuation remains a long way from looking low on most measures, including Shiller’s CAPE. This is a key reason why we expect the returns from US... 25th July 2022 · 5 mins read
FX Markets Weekly Wrap The rally in the US dollar pauses ahead of the Fed After a series of strong weeks left it at two-decade highs, the US dollar seems set to end this week lower against most major currencies. Despite weaker-than-expected activity data out of the US, UK... 22nd July 2022 · 9 mins read
Latin America Economics Weekly Colombia’s trade deficit, Chilean peso’s rollercoaster The somewhat surprising widening of Colombia’s trade deficit in May suggests that the current account deficit isn’t narrowing as we’d expected. This will keep the peso on the backfoot and the central... 22nd July 2022 · 6 mins read
Emerging Europe Economics Weekly Ukraine default, Russia return to fiscal normality? Policymakers in Ukraine devalued the hryvnia this week and asked creditors to suspend debt repayments, which will free up funds for the government, but will add to inflation and increase balance sheet... 22nd July 2022 · 7 mins read
FX Markets Update We expect “high-beta” DM currencies to fall further Despite their recent rebound, we still think that “high-beta” developed market currencies will weaken further against the US dollar for the remainder of the year. 22nd July 2022 · 2 mins read
Global Economic Outlook Recession threat broadens The outlook for the world economy has darkened again and we have reduced our forecasts for all major economies, leaving them further below the consensus of economists. We now anticipate recessions in... 21st July 2022 · 49 mins read
Capital Daily Lagarde snatches defeat from the jaws of victory Despite the ECB’s attempt at a hawkish policy shift and to shore up euro-zone periphery sovereign bond markets, we doubt the worst is over for euro-zone financial markets. 21st July 2022 · 6 mins read
EM Valuations Monitor Assessing contagion risks for EM valuations Even though equity and bond valuations in frontier markets and a few smaller emerging markets (EMs) have fallen sharply, we think the risk of contagion is low and that most EMs will hold up relatively... 21st July 2022 · 7 mins read
India Chart Pack Demographics to remain an important growth driver The latest population projections released by the UN this month show that India will overtake China as the world’s most populous nation in 2023 (see Chart 1), a touch earlier than previously expected... 21st July 2022 · 9 mins read
US Chart Pack Economic growth to remain muted in H2 The incoming activity data now show clearer signs of weakness, particularly in the most interest-rate sensitive components of spending. But there are still few signs of that moderation morphing into a... 21st July 2022 · 8 mins read
Emerging Markets Economics Update What do rising bond yields mean for EM public debt? The rise in local currency bond yields across the emerging world poses a particular risk to fiscal positions in those EMs with large government financing needs and a short average debt maturity. Egypt... 21st July 2022 · 4 mins read
Global Markets Update We doubt the stage is set for a “profitless” S&P 500 rally While the valuation of the S&P 500 has fallen a long way, we don’t expect it to rebound any time soon; this is one reason we expect the index to continue to struggle over at least the remainder of... 21st July 2022 · 5 mins read
Nordic & Swiss Economic Outlook Rate hikes and recessions loom large The near-term economic outlook has deteriorated in recent months and Switzerland, Sweden, and Denmark are set for mild recessions in late 2022 and early 2023. This is partly a function of external... 21st July 2022 · 12 mins read
Australia & New Zealand Chart Pack RBA to hike rates more sharply than most anticipate The minutes of the RBA’s July meeting showed that the Bank debated a smaller 25bp rate hike but ended up hiking rates by 50bp. Those minutes also included a discussion of the level of the neutral... 21st July 2022 · 11 mins read
Capital Daily We expect a renewed rise in Gilt yields before long The release of strong UK labour market and inflation figures this week, coupled with the growing likelihood that the next Conservative Party leader will loosen fiscal policy, strengthen our conviction... 20th July 2022 · 7 mins read
Emerging Europe Economic Outlook Sharp slowdown in store as storm clouds gather Economies in Emerging Europe were resilient in the first half of this year, but the outlook has deteriorated markedly as headwinds have strengthened. Inflation is likely to continue rising and we... 20th July 2022 · 26 mins read
