Global Markets Update

Reassessing our forecasts for US markets

We still expect a higher 10-year Treasury yield, lower S&P 500 and stronger US dollar over the remainder of the year, but have pared back our forecasts for the rise in yields and fall in equities. In...

29th July 2022

Global Markets

The threat to global markets from tweaking YCC again

While a lot of attention has focussed naturally on the potential implications for the JGB market of a further tweaking of the Bank of Japan’s Yield Curve Control , the country’s huge investment in...

15th July 2022

We think bond yields will fall sharply until next year, while equities struggle and the US dollar continues to strengthen.

While we think the sell-off in government bond markets is probably almost over, with central banks still hawkish we doubt yields will fall over the rest of this year. Meanwhile, the deteriorating economic backdrop will, in our view, keep “risky” assets such as equities under pressure and fuel some safe-haven demand for the US dollar. We don’t expect risky assets to rally until mid-2023 or so.

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Global Markets

War-induced rally in DM bonds may not be sustained

While the war in Ukraine may well push down the yields of long-dated developed market government bonds further in the near term, we think that a sustained rally in bonds is unlikely unless the war...

2nd March 2022

Global Markets

Taking stock of Russia/Ukraine tensions & market implications

With tensions between Russia and Ukraine continuing, the risk of a conflict with far-reaching economic consequences remains uncomfortably high. This Update considers what the impact on global...

18th February 2022

Global Markets

Four points on Russia’s market sell-off

The sell-off in Russia’s financial markets in response to the reassessment of the likelihood of conflict with Ukraine has pushed up the risk premium on Russian assets to a similar level to that which...

27th January 2022

Global Markets

We doubt valuations will support China’s stock market

While measures of the valuation of China’s stock market have fallen recently, we don’t expect them to rebound soon. This helps to underpin our fairly downbeat forecasts for the country’s stock indices...

5th August 2021

Global Markets

We don’t expect the rally in bond markets to continue

While long-dated government bond yields have plummeted in recent months, we suspect that high inflation and the prospect of tighter monetary policy will see them turn a corner before long. We forecast...

30th July 2021

Global Markets

Repeat of March panic unlikely, despite second waves

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2nd November 2020

Global Markets

We expect Canadian dollar appreciation to persist

We are upgrading our already above-consensus forecast for the Canadian dollar, as we expect higher oil prices, stronger-than-expected GDP growth, and favourable interest rate differentials to drive a...

19th October 2020

Global Markets

Risk of US Treasury backlash unlikely to deter SNB

Although the SNB meets the US Treasury’s criteria for a “currency manipulator”, we doubt this would deter it from intervening further in the foreign exchange market if required to keep the franc...

7th October 2020

Global Markets

What does history tell us about interest rates and the dollar?

We expect the dollar to regain the ground it has lost this year and to strengthen further, as interest rates and bond yields in the US climb by more than investors are anticipating.

27th January 2017