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Donald Trump’s planned imposition of a 50% tariff on Brazil for seemingly political reasons may represent a new milestone, but Brazil simply isn’t a big enough trading partner of the US to rattle global markets. For that to happen, negotiations with …
10th July 2025
Even if tariffs on US imports don’t rise substantially more next month for many countries after yet another delay, who is ‘paying’ for the increases in tariffs that have already occurred and appear likely to remain in place? The Q2 earnings season, which …
9th July 2025
Market participants have largely shrugged off President Trump’s latest set of threats to raise tariffs on a range of countries, focusing on the fact that today’s “deadline” for re-imposing the “reciprocal tariffs” from 2 nd April has, as widely expected, …
8th July 2025
In this Update, we answer the key questions about what stablecoins are, whether they will become more widely used and what implications they have for the US Treasury market. What are stablecoins? Stablecoins are a type of cryptocurrency, whose value is …
Despite the uncertainty about tariffs, we continue to expect US markets – especially equities and the dollar – to rally over the rest of the year. There have been two key parts of the US tariff drama that have mattered for markets over the past couple of …
7th July 2025
There may be little to stand in the way of further gains in the S&P 500 this summer, provided today’s enactment of the ‘One Big Beautiful Bill’ is followed next week by a market-friendly decision on tariffs and the upcoming earnings season doesn’t spring …
4th July 2025
Another robust US payrolls report supports our view that the FOMC will remain on hold this year and, in turn, our forecast for Treasury yields and the dollar to rebound over the coming months. Today’s June US non-farm payrolls report came in stronger than …
3rd July 2025
We still think gilts will rally over the rest of this year even if fiscal concerns don’t entirely abate, as the Bank of England cuts interest rates by more than investors seem to expect. But concerns about debt levels and a dovish central bank could be a …
Given the limited progress in concluding trade negotiations since Liberation Day, there is a risk that huge tariffs will be imposed on 9 th July after the 90-day pause expires. We suspect that further last-minute concessions will be made to permit …
2nd July 2025
We expect Treasuries to struggle over the rest of the year, despite their recent strong run. At the time of writing, Treasuries’ weeks-long rally seemed to have hit pause . One trigger seemed to be Fed Chair Powell’s comments at the ECB’s Sintra …
The weakness in the dollar in June was easier to explain than its slide in April and May since – unlike in those months – it was accompanied by a shift in bond yields that might have been expected to weigh on the greenback. Even so, there is still a lot …
1st July 2025
With the S&P 500 at a new all-time high, its fall of more than 20% earlier this year already seems like a distant memory. However, we don’t think it’s really back to square one for US equities. For a start, equity indices tend to follow an upward trend. …
30th June 2025
Although the US dollar has tumbled as President Trump has ramped up the pressure on the Fed to cut rates, we don’t think investors are that concerned about the central bank’s independence yet. But the longer the attacks go on, the greater the pressure on …
27th June 2025
With the noise around US tariffs and war in the Middle East fading, at least for now, we think the stage is set for some further decent returns from “risky” assets – especially US equities – over the next couple of years. But we suspect commodities will …
26th June 2025
The Fed’s proposed loosening of supplementary leverage ratio (SLR) rules for big banks might help to improve demand for Treasuries, but we’re not yet persuaded it will outweigh the other headwinds facing the world’s largest bond market. Treasuries have …
With the S&P 500 almost back at a record-high, we take stock of the different drivers of the US stock market’s recent (mis)fortunes. We suspect that the conditions will soon be back for equities in the US to lead those in the rest of the world. Four …
25th June 2025
The overnight announcement of a ceasefire between Israel/US and Iran has brought commodity and financial markets largely back to their pre-conflict square one. While tensions remain high and could easily re-ignite, our sense is that attention will now …
24th June 2025
This Update answers five key questions about a potential “closure” of the Strait of Hormuz and the potential impacts on global energy markets from any attempt to close the waterway. As it stands, it is arguably not in Iran’s best interests to close the …
23rd June 2025
US involvement in the Israel/Iran conflict has so far prompted just some volatility in global financial markets, with most major asset classes ultimately not far away from where they were on Friday. It’s easy, though, to see growing downside risks. …
In general, stock markets tend to be less affected by energy markets today than in the past. But the Israel-Iran conflict has already produced some interesting patterns in stock markets around the world amid a rise in energy prices. Much has been made of …
20th June 2025
Taiwan’s stock market has been a key beneficiary of the AI boom and was one of the top performers in the world in 2024. This year though, equities in fellow Asian tech heavyweight Korea have taken some of the spotlight. We expect Taiwan to be back on top …
We continue to think Treasury yields will rise, as the Fed stays on hold longer than investors expect. There was minimal market reaction on Wednesday (local time) to a cautious Fed : policy was left on hold, the statement was almost unchanged, and the …
19th June 2025
Fears that the US may get involved in the ongoing Israel-Iran conflict have led to another pick-up in oil prices and renewed jitters across financial markets. The impact so far remains limited, but as the conflict continues the risk of a more material …
18th June 2025
Oil prices could feasibly surge to $130-150pb were hostilities between Israel and Iran to escalate in a way that resulted in major disruption to Middle Eastern energy exports and/or shipping through the Strait of Hormuz. However, so long as the conflict …
This Update outlines potential outcomes of the Iran-Israel conflict and teases out the implications for the region, the global economy and commodity and financial markets. One point that emerges is that an escalation of the conflict still leaves multiple …
Although we’ve become less confident the Bank of Japan (BoJ) will raise its policy rate again this year given its view of the risks to growth and inflation, for now we are sticking to our forecast that the 10-year JGB yield will rise to 1.75% by the end …
17th June 2025
Despite the further escalation in the Israel-Iran conflict over the weekend, the impact on major financial markets has remained relatively limited. Unless there is actual (not just feared) disruption to energy export infrastructure, the economic and …
16th June 2025
While spreads in the euro-zone have narrowed further recently, nearing multi-year lows, this is mainly because underlying German Bund yields have risen. Indeed, public finances in some euro-zone countries remain concerning, and rising rates elsewhere may …
13th June 2025
At the time of writing, global markets were in a “risk-off” mood after Israel’s strikes on Iran. We think there are three key initial points to make. First, as is almost always the case when Middle East tensions escalate, the key channel through which …
The overnight strikes by Israel on Iran mark a major escalation in the conflict in the region and, with the oil market tighter than it was a few months ago, the risks to oil prices look more balanced than we’d previously thought (rather than skewed to the …
President Trump’s latest tariff threats, combined with some softer US price and employment data, has sent the US dollar to its lowest level, in aggregate, in more than three years. There are still some factors that point to a near-term rebound, but that …
12th June 2025
President Trump’s recent suggestion that he may yet ratchet US tariffs higher highlights how much uncertainty there still is around both where tariff rates will eventually settle and the US policy outlook more broadly. That said, our sense is that markets …
Yet another downside US CPI surprise gave only a small boost to Treasuries, probably because tariff-driven price hikes still look imminent. That said, these price hikes look discounted in markets, so we don’t expect much upwards pressure on Treasury …
11th June 2025
Colombia’s fiscal problems have returned to the spotlight amid rumours that the government will suspend the fiscal rule. This has triggered a sell-off in the bond market, but it doesn’t look like the deterioration in the fiscal situation has been fully …
10th June 2025
US-China trade negotiations ongoing in London this week have the potential to have a bearing on financial markets, perhaps especially in China. We think there are two key questions to consider. First, how much of a boost could an eventual “deal” – or …
With one month to go until the “pause” of the Trump administration’s “reciprocal tariffs” is, at least in principle, set to expire, market participants continue to take a pretty relaxed view of the risks around US trade policy. That probably makes sense, …
9th June 2025
May’s Employment Report in the US ought to assuage concerns about the economy after some softer data earlier this week. But even if growth there holds up over the rest of the year, investors’ current outlook suggest there may be only limited upside for …
6th June 2025
While the ECB cut its policy rate today, as widely expected, President Lagarde’s accompanying comments tilted hawkish and have given interest rate expectations and the euro a boost. Our view remains that the ECB will deliver at least one more rate cut …
5th June 2025
India’s stock market has fared well this quarter, outperforming other emerging market equities in aggregate, but we doubt this bout of outperformance will last in the near term. The good times seem to be back for India’s stock market, after a few months …
We doubt Section 899 of the One Big Beautiful Bill that passed the House of Representatives in May will have the big negative effects on US asset markets that some seem to fear, even if it remains largely untouched in the Senate. To re-cap, Section 899 …
4th June 2025
Below-target inflation in the euro-zone and deflation in Switzerland bring back memories of the 2010s, but the drivers of low inflation are fundamentally different this time and we don’t see much scope for government bond yields to fall. Data released …
3rd June 2025
To some extent, the persistent underperformance of US small-cap (SC) equities probably reflects lingering concerns about the effects of Donald Trump’s policies on the economy. But even if fears of a recession fade, we doubt US SC equities will fare better …
2nd June 2025
Most emerging market equities have held up surprisingly well of late, and in fact broadly outperformed global equities. But we think further outperformance is unlikely, especially for commodity exporters. Emerging market (EM) equities have been remarkably …
30th May 2025
We’re nudging up our forecasts for equities in most non-US developed markets, partly in response to our upwardly revised projections for the S&P 500 . But we still think they’ll lag equities in the US, if perhaps less significantly than they did earlier …
This report is part of our Future of Europe series. Read more analysis, explore the supporting data, and learn about our broader European coverage on the dedicated Future of Europe page. Europe is being buffeted by geopolitical and geoeconomic shifts but, …
We’re cautiously optimistic about the prospects for China’s stock market over the rest of the year, despite the clear headwinds it faces. It’s not surprising that China’s equity markets have been among the most volatile globally over the past day or so , …
Despite a positive initial reaction in global stock markets to yesterday’s ruling by the US Court of International Trade (CIT), there is still plenty of uncertainty about future tariffs on US imports. So a really big boost to equities may not be on the …
29th May 2025
In this Update, we answer several key questions about how the US Court of International Trade (CIT) tariff ruling might affect the US and other economies. The outlook may now rest on the decision of the Republican-stacked Supreme Court. The upside risks …
The recent substantial volatility in global sovereign bond markets hasn’t altered our view that in most cases 10-year government bond yields will end this year near, or below, their current levels. We also think corporate bonds will continue to do quite …
Despite all of the debt and deficit news out of the US, the spotlight in ultra-long bond markets has increasingly been focused on Japan. The surge in yields there last week seems to have sparked a global sell-off, and the subsequent plan from Japan’s …
28th May 2025
