Global Markets Update US companies still building up their cash piles The ratio of US non-farm, non-financial companies’ liquid financial assets to their short-term liabilities rose to its highest level in over fifty years in Q4 according to the Federal Reserve’s latest... 14th March 2011 · 1 min read
Global Markets Update How will Japan's disaster affect the rest of the world? The devastation caused by the earthquake and tsunami that struck north-eastern Japan on Friday so far appears to have had remarkably little impact on financial markets in the rest of the world... 14th March 2011 · 1 min read
Global Markets Update Better days should lie ahead for EM equities The underperformance of emerging market (EM) equities relative to developed market (DM) equities is showing little sign of drawing to a close. But we doubt it will last much longer. Admittedly, EM... 8th March 2011 · 1 min read
Global Markets Update Have oil prices already overshot? Another day, another $5 on the cost of a barrel of crude. At this rate it will not be long before prices revisit the highs above $140 seen in 2008. Given the pace at which markets are moving and... 24th February 2011 · 1 min read
Global Markets Update What does the Libyan crisis mean for oil prices? Thus far we have taken a relatively sanguine view of the global economic and market fall-out from the political turmoil in the Middle East and North Africa. The fact that the unrest has spread to... 21st February 2011 · 1 min read
Global Markets Update What should we make of surging share buy-backs? One argument put forward for the rally in the US equity market is that share buy-backs are booming. This argument has its theoretical shortcomings, especially if the share buy-backs are financed with... 14th February 2011 · 1 min read
Global Markets Update Crisis in Egypt could keep food prices higher for longer Much of the coverage of the wider fall-out from the crisis in Egypt has focused on the potential impact on oil prices, but this threat to the global recovery is almost certainly exaggerated. Instead... 2nd February 2011 · 1 min read
Global Markets Update Recent weakness in gold price unlikely to be sustained The price of gold has fallen in recent weeks as reduced safe haven demand has more than offset the increase in inflation fears associated with the rises in some other commodity prices and the renewed... 26th January 2011 · 1 min read
Global Markets Update Our big calls for 2011 (and beyond) We expect 2011 to be a year of generally disappointing growth but also fading fears of inflation in the developed economies, with lower industrial commodity prices and a stronger US dollar against... 13th January 2011 · 1 min read
Global Markets Update Gilts should have a better second half of the year Gilts have had a rough ride over the past couple of months in common with the government bonds of other major economies. Things are unlikely to improve for a while – we think the 10-year yield will... 12th January 2011 · 1 min read
Global Markets Update "Currency war" still phoney but China tensions spreading The Brazilian government’s accusations that the US is engaged in a “currency war” are always good for a headline but continue to have little foundation. China’s manipulation of the renminbi remains a... 10th January 2011 · 1 min read
Global Markets Update Can China save the euro? Despite some hopes to the contrary, China is unlikely to be able or willing to do much to solve the debt crisis in the euro-zone. China was presumably already buying a significant amount of peripheral... 6th January 2011 · 1 min read
Global Markets Update How useful is nominal GDP as a guide to bond yields? One approach to forecasting long-term government bond yields is to assume that they should normally match the rate of growth of nominal GDP. For example, this approach is currently being used by some... 4th January 2011 · 1 min read
Global Markets Update Gold price forecast raised to $2,000 The improvement in the near term prospects for the global economy has prompted us raise our end- 2011 price forecasts for industrial commodities. However, our new forecasts of $75 per barrel for oil... 20th December 2010 · 1 min read
Global Markets Update Chinese demand won't support commodity prices for ever Based on a plausible scenario for the evolution of the sustainable growth rate of the economy and the commodity-intensity of activity, China’s commodity demand in 2025 could be half the level that a... 15th December 2010 · 1 min read
Global Markets Update 2011 looks less promising for the US equity market The US equity market is ending the year with a flourish. The S&P 500 has risen by about 5% so far in December, and is not far shy of our year-end target of 1250. Nonetheless, we are sceptical the... 14th December 2010 · 1 min read
