Global Markets Update Corporate bonds likely to outperform in the E-Z in 2020 We expect the rally in corporate bonds in the US, UK and euro-zone to unwind a bit in the rest of 2019 as global growth slows further. Next year, we think that corporate bonds in the US and the UK... 18th October 2019 · 3 mins read
Global Markets Update Record-low inflation compensation unlikely to persist Though government bond yields have rebounded over the past week, inflation compensation remains near record lows in the US and the euro-zone. In our view, this is unlikely to persist, especially in... 17th October 2019 · 3 mins read
Global Markets Update Weak earnings might spark a sharp fall in US equities The corporate earnings season starting this week in the US could provide the trigger for the drop in the S&P 500 that we forecast to happen this year. Indeed, we think that earnings will disappoint... 15th October 2019 · 3 mins read
Global Markets Update We expect EM equities to fall further As the outlook for the global economy continues to worsen, we expect risky assets generally to struggle over coming months and emerging market equities to fall further. East Asian markets are likely... 11th October 2019 · 3 mins read
Global Markets Update Portugal/Spain spread won’t fall further in our view The yield of 10-year government bonds in Portugal has fallen below that of their counterparts in Spain this week after Portugal’s Socialist Party retained power in Sunday’s legislative elections... 11th October 2019 · 3 mins read
Global Markets Update CAD resilience relative to AUD & NZD unlikely to last We expect appetite for risk and monetary policy to continue to be more important factors than commodity prices in determining the direction of the Aussie, Kiwi and Loonie. With that in mind, we think... 9th October 2019 · 3 mins read
Global Markets Update Broad US dollar strength likely to continue for now As the outlook for the global economy grows gloomier, the US dollar is strengthening towards multi-year highs. We expect it will appreciate further as safe haven demand intensifies over coming months. 4th October 2019 · 3 mins read
Global Markets Update Global factors the greatest risk to Japan’s equity market While the hike to Japan’s sales tax means its economy will probably contract in Q4, we suspect that the impact on bonds and equities there will be fairly small. However, we still think that Japan’s... 3rd October 2019 · 3 mins read
Global Markets Update Difficult to see US earnings living up to expectations Investors’ continued optimism about corporate earnings in the US is hard to square with our view that economic growth there and in the rest of the world will remain weak. That is the key reason why we... 27th September 2019 · 3 mins read
Global Markets Update Revising up our forecasts for Indian equities We have revised up our forecasts for India’s Sensex equity index following the corporate tax reform there. And more generally, we expect it to be one of the best performers among EM stock markets over... 27th September 2019 · 3 mins read
Global Markets Update EM local currency bonds likely to struggle from here The combination of a broad-based easing cycle in emerging markets and strong demand for risky assets has pushed local currency emerging market (EM) sovereign yields down sharply in 2019. However, we... 25th September 2019 · 3 mins read
Global Markets Update Fed to stop easing soon, pushing Treasury yields up Given our view that the US economy will avoid a recession, we doubt that the Fed will deliver as many rate cuts as investors anticipate. As such, we think that Treasury yields will rise substantially... 20th September 2019 · 3 mins read
Global Markets Update Another oil shock would probably see the dollar rise, not fall Although the oil price has fallen back since the weekend’s attacks on production facilities in Saudi Arabia, it could surge again if there are further strikes or if tensions in the Middle East... 19th September 2019 · 3 mins read
Global Markets Update Is the ECB really to blame for euro weakness in 2019? Despite what Mr Trump’s tweet yesterday appears to suggest, we don’t think that the ECB is “trying, and succeeding, in depreciating the Euro”. And although we expect the euro to weaken further against... 13th September 2019 · 3 mins read
Global Markets Update Implications of the M5S/PD coalition for Italian assets Italian assets have rallied since a new ruling coalition between the Five Star Movement (M5S) and the Democratic Party (PD) was formed. While we have revised our forecasts to reflect the reduced... 11th September 2019 · 3 mins read
Global Markets Update Treasury yields likely to rebound as Fed disappoints Although we are revising down our once-bullish forecast for the 10-year US Treasury yield, we think that it has fallen too far and will rebound to 1.75% by the end of 2019 and rise significantly next... 6th September 2019 · 3 mins read
