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Despite tentative signs of improvement in the euro-zone economy recently and our expectation that long-term US Treasury yields will rise significantly over the next couple of years, we forecast that the yields of 10-year euro-zone government bonds will …
6th May 2021
Retail sales probably surged in Germany, but fell in France (10.00 BST) BoE likely to revise forecasts up, but push back against expectations of rate hikes (12.00 BST) We expect US jobless claims to confirm that the labour market is rebounding fast (13.30 …
5th May 2021
The final reading for Euro-zone PMIs for April likely to be revised down a touch (09.00 BST) ADP report may point to stronger US employment growth in April (13.15 BST) We expect Brazil’s central bank to hike its policy rate by 75bp (22.30 BST) Key Market …
4th May 2021
We expect Brazil’s central bank to hike its policy rate by 75bp, to 3.50% (Wed.) China’s Caixin services PMI will probably point to growth momentum waning (Thu.) US employment report likely to show continued acceleration in the pace of recovery (Fri.) Key …
30th April 2021
We continue to forecast that a strong recovery in the global economy and ongoing policy support will drive further increases in developed market (DM) and emerging market (EM) equities over the next couple of years. But given our view that the yields of …
The Fed is likely to leave its current policy settings unchanged this evening… … but we think data tomorrow will show Q1 US GDP growth hit 7.0% annualised (13.30 BST) Euro-zone economic sentiment was probably unchanged in April (10.00 BST) Key Market …
28th April 2021
Fed likely to strike an optimistic tone but maintain its dovish stance (19.00 BST) Biden due to unveil details of $1.5tn American Families Plan Read our highest conviction macro forecasts and their market implications here Key Market Themes We do not …
27th April 2021
We expect risk premia on emerging market (EM) bonds to diverge over the coming years even if appetite for “risky” assets generally continues to increase . To recap, after rising sharply in February-March last year, risk premia on EM bonds declined …
Higher inflation in Brazil may set the stage for further rate hikes (13.00 BST) We think that US consumer confidence continued to recover in April (15.00 BST) Bank of Japan & Sweden’s Riksbank will probably both keep policy settings unchanged Key Market …
26th April 2021
The Fed is likely to stick its dovish policy stance despite a brightening economic outlook (Wed.) We think a surge in consumption will have driven US GDP growth to 7.0% in Q1… (Thu.) … while we expect the euro-zone and Czech economies contracted in Q1 …
23rd April 2021
We doubt that the recent fall in long-term Treasury yields will persist, and are sticking with our view that they will rise a fairly long way by the end of the year. To recap, after increasing significantly in the first quarter of this year, long-term …
22nd April 2021
While the valuation of the MSCI Emerging Markets (EM) Latin America Index is now low both by past standards and on a relative basis, we think that further gains in the index will be driven mostly by expectations for strong earnings. To recap, the forward …
UK government borrowing probably hit a peacetime record in March (07.00 BST) We expect Russia’s central bank to hike its policy rate by 50bp (11.30 BST) Strong April PMIs look likely in the US & UK, but they may have declined in Europe Key Market Themes …
Higher energy prices probably pushed up inflation in the UK in March (07.00 BST) We think inflation in South Africa rose to 3.5% y/y, primarily due to base effects (09.00 BST) We expect the Bank of Canada to reduce the pace of its asset purchases (15.00 …
20th April 2021
We no longer expect the MSCI Switzerland Index to outperform the MSCI USA Index over the next couple of years and have lowered our end-2021 and end-2022 forecasts accordingly. Back in August, we predicted that the MSCI Switzerland Index would outperform …
Euro-zone bank lending survey likely to reinforce ECB’s resolve to keep policy loose UK unemployment rate probably remained around 5.0% in February (07.00 BST) Read our highest conviction macro calls, and their market implications here Key Market Themes …
19th April 2021
ECB may explain reasons behind the limited rise in PEPP purchases since its last meeting (Thu.) We expect PMI surveys to have rebounded in the UK, but fallen in the euro-zone in April (Fri.) Russia’s central bank likely to hike rates in response to high …
16th April 2021
We think the IMF’s anticipated $650bn Special Drawing Rights (SDR) allocation is unlikely to have a major market impact, although it might provide countries with falling exchange rates and low levels of reserves – such as Argentina and Turkey – some scope …
15th April 2021
We think China’s Q1 GDP growth slowed in q/q terms (03.00 BST) Euro-zone inflation probably remained low in March, but it could pick up soon (10.00 BST) April US consumer confidence may have been boosted by stimulus & reopening (15.00 BST) Key Market …
In our view, changes to the economic and policy outlook since the pandemic mean that corporate credit spreads in the US may remain lower than in their recent past for some time. Nonetheless, we see limited scope for them to fall much further from here. …
We think that US retail sales surged by 8.5% m/m in March… (13.30 BST) …and US industrial production rebounded by 2.8% m/m. (14.15 BST) We expect Turkey’s central bank to cut the policy rate by 200bp. (12.00 BST) Key Market Themes Although the stock …
14th April 2021
We think that transitory factors pushed inflation in Sweden above 2% in March (08.30 BST) Industrial production in the euro-zone probably fell due to supply shortages (10.00 BST) We expect March retail sales in the US surged following weaker sales last …
13th April 2021
US headline CPI likely to have jumped above 2% in March (13.30 BST) We think that the UK economy grew by 0.5% m/m in February (07.00 BST) Strong foreign demand probably continued to boost China’s exports last month Key Market Themes Although the euro has …
12th April 2021
US retail sales & industrial production probably surged last month (Wed.) We think that Turkey’s central bank will cut rates by 200bp, to 17.00% (Thu.) Read our highest convictions macro calls and their market implications here Key Market Themes The …
9th April 2021
We expect higher government bond yields in the US than in other developed markets (DMs) to push the US dollar up, as has generally been the case since the Global Financial Crisis. Admittedly, the relationship between the government bond yield gap and the …
Energy price effects may have boosted inflation in China, Brazil and Sweden last month We think that Germany’s industrial production rose strongly in April (07.00 BST) Canada’s employment probably grew in March, but is unlikely to do so this month (13.30 …
8th April 2021
In recent years, and particularly since the start of the pandemic, the pressure on central banks to address climate change has increased. This Update considers the potential implications for financial markets of some of the changes they have made until …
Minutes from the Fed’s March meeting could reveal strength of the dovish consensus Sweden’s activity data likely to have held up reasonably well in February (08.30 BST) Energy base effects probably drove a sharp rise in Mexico’s inflation last month …
7th April 2021
PMIs in Spain and Italy probably rose in March We think the US trade deficit widened in February (13.30 BST) FOMC minutes may provide some indication of how strong dovish consensus is (19.00 BST) Key Market Themes While any changes to the US tax code may …
6th April 2021
We expect US non-farm payroll to have increased by 700,000 in March (Fri. 2 nd April) Fed and ECB minutes may shed more light on the central banks’ latest thinking (Wed. & Thu.) We think central banks in India and Poland will keep their policy rates on …
1st April 2021
We have become more pessimistic about the outlook for emerging market (EM) assets and currencies as we now expect the 10-year US Treasury yield to rise further over the next two years . EM assets and currencies have come under pressure recently. (See …
We now think that 10-year government bond yields in most developed markets (DMs) will rise further. However, we think that they will climb more rapidly in the US than elsewhere in the developed world. As such, we have revised up our forecast for the US …
31st March 2021
Euro-zone inflation probably increased in March and is likely to keep rising (10.00 BST) We expect the ADP employment report to point to a 700,000 gain in US non-farm payrolls US President Biden to unveil plans for a major infrastructure spending package …
30th March 2021
Japan’s unemployment rate probably stayed low in February (00.30 BST) Euro-zone economic sentiment may have improved this month (10.00 BST) Join us for a Drop-In on the Swiss franc on Tuesday (15.00 BST) Key Market Themes We expect a further divergence in …
29th March 2021
We have recently revised up our end-21 and end-22 projections for the US ten-year Treasury yield, which has prompted us to revise down our forecasts for emerging market (EM) assets and currencies. To recap, we had previously expected EM equities to rise …
26th March 2021
We now expect that the US dollar will strengthen somewhat over the next couple of years as the US economy outperforms and its policy mix diverges from that in most other major economies. Last year, the US dollar went through two distinct phases. The …
High frequency data point to an upturn in UK retail sales volumes in February (07.00 GMT) We expect Germany’s IFO Business Climate Index to have risen in March (09.00 GMT) US real consumption likely to have fallen temporarily last month (12.30 GMT) Key …
25th March 2021
Philippines’ central bank unlikely to cut rates despite economic weakness (08.00 GMT) We think that inflation in Brazil rose sharply earlier this month (12.00 GMT) Falling inflation in South Africa probably rules out a rate hike this week (13.00 GMT) Key …
24th March 2021
In light of our revised forecasts for long-term US Treasury yields, we have raised our forecasts for the yields of 10-year government bonds in most other developed markets. But in most cases we doubt they will rise by as much as yields in the US. We …
We think that UK consumer price inflation nudged up in February (07.00 GMT) Euro-zone composite PMI likely to have declined slightly (09.00 GMT) Severe weather probably weighed on US durable goods orders last month (12.30 GMT) Key Market Themes It is a …
23rd March 2021
We think that the UK’s unemployment rate held roughly steady in January (07.00 GMT) Hungary’s central bank not likely to tighten, despite above-target inflation (13.00 GMT) Key Fed speakers will probably reiterate Powell’s dovish line Key Market Themes …
22nd March 2021
Unlike Brazil, Turkey & Russia, we think most other EM central banks will put off hiking We think flash PMIs in the UK and the euro-zone will point to activity remaining subdued The fall in US personal income & spending in Feb. will probably be reversed …
19th March 2021
The sharp rise of US yields in response to this year’s shift in US fiscal policy and rapid progress on vaccinations – and the Fed’s apparent willingness to accept higher long-term interest rates – have prompted us to raise our end-2021 and end-2022 …
The BoJ may tweak some of its policy settings, including its yield curve target tolerance band UK government borrowing is likely to have remained high in February (07.00 GMT) We expect Russia’s central bank to keep its policy rate on hold at 4.25% (10.30 …
18th March 2021
Fed’s Powell likely to reiterate dovish message (18.00 GMT, Wed.) We expect Turkey’s central bank to hike its one week repo rate by 100bp (11.00 GMT, Thu.) BoE could emphasise dovish rates guidance, but not likely to up QE buying (12.00 GMT, Thu.) Key …
17th March 2021
We had expected Brazil’s stock market to be among the best performers in the world this year, but with the virus still running rampant and populist policymaking on the rise, we now think its underperformance will continue for some time. In general, we …
Headline inflation in Canada likely edged up in February (12.30 GMT) We think the Fed will reaffirm its intention to keep policy accommodative (18.00 GMT) We expect that Brazil’s central bank will start tightening policy with a 50 bp hike (21.00 GMT) Key …
16th March 2021
Despite the recent turmoil in bond markets, we continue to expect developed market (DM) equities to gain ground in the rest of this year as real yields remain quite low and economic growth stays strong . DM equities have held up well recently, despite …
Severe weather probably weighed on US retail sales in February… (12.30 GMT) … but industrial production may have held up slightly better (13.15 GMT) Fed, BoJ and BoE meetings this week may shed more light on their thinking about rise in yields Key Market …
15th March 2021
We think that high FX-hedged yields on 10-year US Treasuries will encourage more purchases from non-US investors and may help to limit the rise in US government bond yields even as the economy recovers. Since the start of the year, the prospects for the …
12th March 2021
