Canada Economics Weekly Canadian dollar's underperformance to persist The Canadian dollar rebounded yesterday following the confirmation that Canada’s economy will be exempt from US tariffs on steel and aluminium. It isn’t out of the woods yet, however. NAFTA’s future... 9th March 2018 · 1 min read
Japan Economics Weekly Yen strength another stumbling block for BoJ The yen would have to strengthen much further before it turns into a major drag on export competitiveness and corporate profits. However, the recent appreciation should bring the pick-up in goods... 9th March 2018 · 1 min read
China Economics Update Is the Hong Kong dollar peg under threat? The Hong Kong dollar has weakened this week to historic lows, though remaining within the narrow confines of its currency peg. But this is the result of ample domestic liquidity which has kept local... 8th March 2018 · 1 min read
EM Valuations Monitor Equity valuations unlikely to lend near-term support The price/forward earnings ratio of the MSCI Emerging Markets (EM) Index has fallen back a touch as the index has had a bumpy start to the year. We doubt that valuations will provide any support over... 7th March 2018 · 1 min read
Australia & New Zealand Economics Weekly There goes Australia’s interest rate premium Our relative views on monetary policy in the US and Australia suggest that US 10-year bond yields will rise further above Australian yields this year. While this would be rare, what’s more unusual is... 2nd March 2018 · 1 min read
Europe Economics Focus How big a threat is Italy’s election? Italy’s general election on Sunday 4th March seems likely to result in a government that pushes for a small fiscal stimulus, largely centred on tax cuts. But we doubt that this would provide much of a... 28th February 2018 · 1 min read
Middle East & North Africa Economics Update What do higher US interest rates mean for the Gulf? The Gulf’s dollar pegs mean that further rate hikes by the US Federal Reserve will be imported into the region, keeping a lid on credit growth and pushing up government borrowing costs. This is... 27th February 2018 · 1 min read
UK Markets Outlook Markets still underestimating pace of rate hikes Financial markets are now pricing in a 60% probability of the Monetary Policy Committee (MPC) raising Bank Rate by a further 25bps in May, up from around 40% at the start of the year. But we still... 26th February 2018 · 1 min read
DM Valuations Monitor Will a growing twin deficit drive the dollar even lower? The dollar’s weakness in the face of tighter Fed policy is reminiscent of the mid-2000s. At the time, interest rates and bond yields also moved in favour of the US, but its currency was dragged down... 23rd February 2018 · 1 min read
Asia Economics Weekly Philippines: Time to worry about the weak peso? A low level of foreign currency debt in the Philippines means the recent weakness of the peso is not a major concern. In fact, despite the current worries about rising inflation, policymakers appear... 23rd February 2018 · 1 min read
EM Markets Chart Pack EM assets vulnerable to further falls in US equities The recent sell-off in emerging market (EM) equities after the US stock market slumped reiterated how exposed they are to movements in developed market equities. Although EM equities have since... 23rd February 2018 · 1 min read
Global Markets Focus Are the best days over for EM financial markets? After a very strong run, EM bonds, equities and currencies have all faltered recently. Although they have since bounced back a bit, we think that their best days are now over. 22nd February 2018 · 1 min read
Nordic & Swiss Economics Focus Iceland: What went right and what might go wrong? Icelandic growth is set to hold up well with tourism booming despite the strength of the króna and with the financial imbalances that caused the previous crisis largely resolved. But inflation is a... 21st February 2018 · 1 min read
US Economics Update Weaker dollar is here to stay After depreciating by almost 10% in trade-weighted terms since the beginning of 2017, we suspect that the dollar is set to remain relatively stable over the next few years. The depreciation already... 20th February 2018 · 1 min read
Japan Chart Pack Is Japan overheating? Japan’s economy recorded an eighth consecutive quarter of growth in Q4, the longest uninterrupted run of expansion since the late 1980s. Unemployment is very low, inflation has started to pick up... 20th February 2018 · 1 min read
UK Economics Weekly Should rising domestic inflationary pressure worry the MPC? Inflation proved unexpectedly sticky in January, remaining unchanged at 3.0%, contrary to the consensus expectation for it to fall. However, we don’t think that the Monetary Policy Committee (MPC)... 16th February 2018 · 1 min read
