Three key questions for financial markets in 2021

We think that most risky assets will make further gains next year as policymakers continue to anchor safe bond yields around their current levels and the US dollar weakens further.
Jonas Goltermann Senior Markets Economist
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DM Valuations Monitor

Tech sector valuations may have even further to fall

Even though the valuations of technology stocks have, in general, already fallen sharply in recent weeks, we suspect they may decline further over the next couple of years. This is one reason why we expect the sectors in which they are heavily represented to make limited gains, at best, over that period.

25 January 2022

Global Markets Update

Fed tightening & the outlook for US corporate bonds

Our baseline forecast envisages that US corporate bond spreads rise only slightly as the Fed raises interest rates over the next couple of years. But we think the risks to this forecast are skewed to higher spreads.

21 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

More from Jonas Goltermann

FX Markets Update

Taking stock of the carry trade after the FOMC’s surprise

While the shift towards rate hikes in several key emerging markets has provided a boost to their currencies, we doubt that the carry trade will fare as well in the second half of the year.

6 July 2021

Capital Daily

This may be as good as it gets for the Aussie and Kiwi

Although the RBA’s hawkish message today and further strong data out of New Zealand sent the Aussie and Kiwi higher, we are becoming less confident in our existing, bullish forecasts for both currencies. In our view, much of the good news on strong domestic recoveries and monetary policy normalisation in Australia and New Zealand is now discounted, but the downside risks from the economic slowdown in China and its impact on commodity prices are underappreciated.

6 July 2021

FX Markets Weekly Wrap

The US dollar rally may have further to run

The US dollar is ending the week stronger against most currencies, although it has fallen back a little this afternoon despite the stronger-than-expected non-farm payrolls report. While that reaction is perhaps a bit puzzling, the bigger picture is that the greenback has extended its post-FOMC rally against the other major currencies this week. We expect it to make further headway, provided that US data continue to come in strong.

2 July 2021
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