Global Markets Update Demand for EM equities grows despite Ukraine crisis The crisis in Ukraine is continuing to have very little effect on the financial markets in most other emerging countries, with the notable exception of Russia. In the past month or so, the MSCI... 24th July 2014 · 1 min read
Global Markets Update Market fall-out from Ukraine crisis unlikely to be over The relatively muted reaction in the financial markets so far to the latest tragic turn in the crisis inUkraine – as well as the escalation of the conflict in Gaza and the gains by ISIS in Iraq –... 18th July 2014 · 1 min read
Global Markets Update Is China behind the decline in US Treasury yields? The rally in the US government bond market this year has coincided with a pick-up in China’s netpurchases of long-term Treasury securities, which some have attributed to intervention to weaken... 17th July 2014 · 1 min read
Global Markets Update Will EM assets shrug off tighter US monetary policy? Emerging market (EM) assets sold off sharply last year after the former Chairman of the US central bank hinted that unconventional policy stimulus was on borrowed time. But another rout is by no means... 17th July 2014 · 1 min read
Global Markets Update Low JGB yields not a sign of policy failure The persistently low level of Japanese government bond (JGB) yields is not necessarily a sign that“Abenomics” is failing. Indeed, a premature surge in borrowing costs could put the whole project... 16th July 2014 · 1 min read
Global Markets Update Treasuries vulnerable to a recalibration of rate expectations Ignoring term premiums, the yield of a “risk-free” government bond is a reflection of the short-term rates that are expected until it matures. So if the Fed raises the federal funds rate, there ought... 10th July 2014 · 1 min read
Global Markets Update How will the US stock market handle Fed tightening? The US stock market has tended to fare quite well during previous Fed tightening cycles. Although we think its performance in the next cycle will be below average, we still expect it to creep higher. 7th July 2014 · 1 min read
Global Markets Update Plenty of scope for further Nikkei outperformance Japanese equities outperformed their peers in June and have continued to do well so far in July. We believe there is still plenty of scope for further gains in the Nikkei 225 even if, as we expect... 4th July 2014 · 1 min read
Global Markets Update Market implications of our revised forecast for Fed policy We now think that the US FOMC will tighten monetary policy sooner, and by more, than we had previously envisaged. Our revised view is that the federal funds rate will end 2016 at 3.0%, rather than 2.5... 2nd July 2014 · 1 min read
Global Markets Update How vulnerable are US corporate bonds to tighter Fed policy? The onset of Fed tightening has not tended to drive up spreads on investment-grade corporate bonds much in the past. In fact, in the majority of the seven major tightening cycles since the early 1970s... 27th June 2014 · 1 min read
Global Markets Update Volatility versus value in the emerging markets We do not think that an end to the current low level of volatility in financial markets would necessarily dull investors’ appetite for riskier assets in the emerging world. In fact, our view is that... 25th June 2014 · 1 min read
Global Markets Update Will EM assets shrug off tighter Fed policy? We are sceptical that tighter US monetary policy will spell disaster for emerging market (EM) assets. Granted, their prices fell sharply after Ben Bernanke first hinted that the Fed was thinking about... 24th June 2014 · 1 min read
Global Markets Update Another selection of our non-consensus calls This Update provides some examples of where our views on the economic and market outlook differ significantly from the consensus. It draws on the range of country and regional services produced by our... 23rd June 2014 · 1 min read
Global Markets Update Market implications of our revised UK Bank Rate forecast The strength of the UK’s economic recovery and more hawkish signals coming from members of the Bank of England’s Monetary Policy Committee (MPC) have prompted us to revise our projection for the path... 19th June 2014 · 1 min read
Global Markets Update Should we expect another "conundrum" in the bond market? The 10-year Treasury yield rose by only a small amount during the Fed’s last major tightening cycle. But this “conundrum” was largely the result of a collapse in the term premium (TP) from a level... 18th June 2014 · 1 min read
Global Economics Update Iraq crisis tops a long list of geopolitical risks There are good reasons to be relaxed about the global economic fall-out from the latest crisis in Iraq, including the possibility that it might actually lead to an improvement in relations between the... 16th June 2014 · 1 min read
