Compared to other independent providers of macroeconomic research, we have three outstanding qualities:
- The quality and breadth of our staff. We employ more than 60 economists and a similar number of support and administrative staff. This is far higher than most of our competitors, and larger than the majority of economics teams at investment banks. Moreover, our key people all have extensive front-line experience of financial markets. Our economists work closely together to enable us to provide the full service which clients need.
- The style and content of our research. It is concise, timely and written in a jargon-free and user-friendly style. We are acutely conscious of the competing pressures on our clients’ time. Accordingly, our research is designed so that clients can, if they so wish, quickly glean the essential message without reading the whole document.
- The flexibility of our services. Our research is provided in a variety of different packages covering different geographies and sectors, with varying amounts of personal contact with our economists. This allows clients to select subject areas and packages which exactly suit their needs – and their budgets.
The quality of our staff shows up in our track record. In particular:
- We were among the first to predict that the pound would fall to as low as $1.20 this year if the UK voted in favour of Brexit. But in sharp contrast to the consensus, we also forecast that the UK economy and global markets would weather the initial shock well.
- In 2015 we were almost a lone voice in correctly forecasting that interest rates in Australia would be cut to 1.5% in 2016 and that this would undermine the Australian dollar.
- Our detailed analysis of the economic problems in the euro-zone has allowed us to predict the fragility of the recovery there. We were also among the first to identify the market opportunities resulting from the threat of deflation and the likelihood of further easing from the ECB.
- In early 2013 our US team was one of the first to predict the start of Fed tapering and a substantial correction in asset prices (as indeed occurred in mid-2013) once the markets began to focus on this prospect. Then in the midst of the turmoil, when many were worrying that the withdrawal of Fed stimulus would result in large and sustained falls in equity prices, we actually revised our stock market forecasts upwards. US equities have since continued to grind higher – as we predicted.
- Since the launch of our dedicated coverage of commodities in 2011 we have generally (and correctly) been bearish on the prices of most industrials. For example, in our Commodities Focus, “The impending collapse of copper prices”, published in April 2012, we forecast a decline to $5,000 per tonne when the price of copper was still above $8,000. And in our Energy Watch, “Oil prices to end the decade much lower”, November 2013, we correctly forecast a sharp drop when the consensus was still that oil prices above $100 per barrel were the “new normal”.
- When UK interest rates were first cut to 0.5% in 2009 we argued that they would stay at or around this level for at least five years in response to prolonged fiscal tightening and a sluggish economic recovery. They are at 0.25% today – seven years later.
- In November 2005, we warned in our US Focus, “The coming US recession”, that a bubble in the housing market would tip the US economy into recession within the next 2-3 years.
- Finally, we have been right time after time on China. Global markets sold off sharply in mid-2015 and again at the start of 2016 on the belief that China’s economy was experiencing a hard landing. Backed by our proprietary China Activity Proxy, we correctly reassured clients that growth was stabilising rather than collapsing and argued that a rebound in 2016 was more likely than a further slowdown.