Global Markets

Global Markets Update

Global Markets Update

The implications of the Russia-Ukraine crisis

The deadlocked end to talks between Russia, the US and NATO and subsequent hawkish noises from Russian officials have caused a risk premium to emerge on Russian asset prices and will keep the prospect of tighter Western sanctions on the table. The downside risks for the ruble and Russian assets are building, as are the upside risks for European natural gas prices. In view of the wider interest, we are also sending this Emerging Europe Economics Update to clients of our Commodities Overview, Energy, FX Markets and Global Markets services.

14 January 2022

Global Markets Update

We think that China’s equities will continue to struggle

Even though we doubt that China’s equities will fare anywhere near as badly over the next couple of years as they did in 2021, we do not expect them to make strong gains from here either.

14 January 2022

Global Markets Update

Key financial market calls for 2022

We do not think the returns from many financial assets will be as good in 2022 as they were in 2021. For a start, we envisage a sell-off in government bonds in most places, reflecting the outlook for monetary policy. And, in general, we foresee an underwhelming performance from equities, including in the US and China. We expect this backdrop to be accompanied by a further broad-based rise in the US dollar. In view of the wider interest, this Global Markets Update is also available to clients of our Asset Allocation & FX Markets services.

13 January 2022
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Global Markets Update

Revising our forecasts for DM 10-year bond yields

We continue to expect monetary tightening to push up 10-year government bond yields across developed markets (DMs) but we now forecast them to reach a higher level than we had previously anticipated, especially in the US, Germany and the UK.

12 January 2022

Global Markets Update

Fed tightening may limit gains in US equities

While we don’t think the stock market’s falls this week mark the start of a sustained rout, we do expect Fed tightening to curb the upside for mid- and large-cap US equities over the next couple of years. And tighter monetary policy might also weigh a bit more heavily on them than on equities elsewhere.

Global Markets Update

Tweaking our forecast for Treasuries

We are revising down our end-2022 and end-2023 forecasts for the 10-year US Treasury yield by 25bp each, to 2.00% and 2.25%, respectively. This compares to its current level of ~1.4%.

17 December 2021

Global Markets Update

We think EM earnings expectations are too optimistic

In our view, analysts’ expectations for earnings across the emerging world over the next couple of years generally look a bit optimistic. And, since we don’t expect a major increase in valuations, we think that emerging market (EM) equities will make only relatively modest gains over the coming year.

Global Markets Update

We think 10-year US inflation compensation will rise again

Even though headline US CPI inflation may now have peaked, we still think long-term inflation compensation could rise a little over the next couple of years.

10 December 2021
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