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Unlike the consensus, we think that Japan’s GDP growth accelerated in Q3 (23.50 GMT) Spending and activity in China probably held up well in October (02.00 GMT) Policy rates in Egypt and Mexico are likely to be cut Key Market Themes While the US dollar …
13th November 2019
EM equities have continued to rise over the past month, seemingly driven by optimism about an imminent US/China trade deal and some improvement in the economic data. But we are sceptical that the rally will last, and forecast that EM equities will tread …
Unlike the consensus, we doubt that the RBNZ will cut rates (01.00 GMT) We think that euro-zone industrial production rose a bit in September (10.00 GMT) Fed Chair Powell due to testify to the Joint Economic Committee of Congress (11.00 GMT) Key Market …
12th November 2019
President Trump’s speech may provide news on trade negotiations (17.00 GMT) Weaker UK labour market figures would make an early rate cut more likely (09.30 GMT) Norway’s economy probably continued to outperform in Q3 (07.00 GMT) Key Market Themes In spite …
11th November 2019
The loss of the South African government’s final investment grade credit rating is already largely priced in, but there are still reasons to be downbeat on the country’s government bonds, and the rand . Concerns about the South African government’s large …
China spending and activity probably held up well in October (Thursday) We think that Germany’s economy narrowly avoided a recession in Q3 (Thursday) Rates cuts likely in Mexico and Egypt (Thursday) Key Market Themes Until President Trump ’s negative …
8th November 2019
If the Conservative Party wins an outright majority in the upcoming general election on 12 th December, as polls suggest is the most likely outcome, there is potentially significant upside for UK equities. Since the 2016 referendum, UK mid- and large-cap …
China’s exports are likely to have continued to contract last month We forecast that employment in Australia fell by 10,000 in October (13.30 GMT) US index of consumer confidence was probably little changed in November (15.00 GMT) Key Market Themes …
7th November 2019
Polls suggest that the general election in Spain this weekend will not end the political deadlock there. That is the key reason why, despite brighter growth prospects, we doubt that bonds and equities in Spain will do better than those elsewhere in the …
Against a backdrop of stubbornly-low inflation and rising unemployment, we now think that the RBA will launch quantitative easing (QE) in 2020. Here, we consider the implications for Australia’s assets. Assessments of the impact of QE elsewhere are not …
Central banks of Thailand and Iceland both likely to cut rates by 25bp Spanish and Italian PMIs probably dropped last month We think that euro-zone retail sales fell in September (10.00 GMT) Key Market Themes Optimism about a trade deal between the US and …
5th November 2019
We expect a small rebound in the US ISM non-manufacturing index (Tue.) The central bank of Iceland is likely to cut its policy rate for the 5 th time this year (Tue.) … … while the Bank of England will probably stand pat for now (Thu.) Key Market Themes …
1st November 2019
The Riksbank appears determined to raise interest rates into an economic slowdown. While higher policy rates may provide some support for the Swedish krona, we still think that it will continue to depreciate. To the surprise of most analysts, ourselves …
We have revised up our end-2019 forecasts for equities, which previously pointed to a large correction. But even without this big pothole, we continue to think that the road ahead for them will be bumpy. Admittedly, we had underestimated the extent to …
31st October 2019
China’s Caixin manufacturing PMI probably dropped back in October (01.45 GMT) Inflation in Switzerland may have turned negative (07.30 GMT) We suspect that non-farm payrolls increased by just 25,000 due to the GM strike (12.30 GMT) Key Market Themes We …
The spotlight has shifted back onto weak sovereign debt positions in Frontier Markets this month after the election of a left-wing president in Argentina and growing political instability in Lebanon. As we see it, debt write-downs are the only way out for …
The Fed will probably cut interest rates by a further 25bp (Wednesday, 19.00 GMT) We think that the Bank of Japan will leave rates unchanged after its policy review (Thursday) China’s PMIs are likely to have dropped a bit in October (Thursday, 01.00 GMT) …
30th October 2019
The yield of 10-year government bonds in Greece is now only slightly above that of 10-year government bonds in Italy. Given Italy’s comparatively poor growth and debt dynamics and greater political risk, we think that it is only a matter of time before …
We think that US GDP slowed to 1.5% annualised in Q3 (12.30 BST) Bank of Canada is likely to keep rates on hold, but cut its growth forecasts (14.00 BST) Another 25bp rate cut by the Fed is widely expected (18.00 BST) Key Market Themes The 10-year US …
29th October 2019
UK PM Boris Johnson will probably agree to delay Brexit until 31 st January at the latest … … and might get Parliament’s approval for a general election in early-December US consumer confidence probably rebounded in October (14.00 GMT) Key Market Themes …
28th October 2019
EU leaders to discuss whether to grant a delay to Brexit and, if so, for how long Germany’s IfO Business Climate Index (BCI) probably fell slightly in October (09.00 BST) Central Bank of Russia likely to cut its policy rate by 50bp, to 6.50% (11.30 BST) …
24th October 2019
Equities in the euro-zone have outperformed those in the US since early October. While we expect this trend to continue, we think that both will fall in the rest of this year, as global growth slows further. While both the MSCI EMU Index and the MSCI USA …
We expect central banks in Indonesia and Turkey to cut their policy rates Internal divisions will remain the focus at Draghi’s last ECB meeting GM strike probably took a toll on US durable goods orders in September (13.30 BST) Key Market Themes Higher …
23rd October 2019
We think that the recent weakness in emerging market (EM) currencies will continue during the rest of 2019, as a weaker global economy triggers a fresh bout of risk aversion. In 2020, we think that the renminbi and the currencies of other Asian EMs with …
While we think that there is still a bit more scope for the Norwegian krone to fall against the euro, we expect the currency to bounce back over the next couple of years, as the country’s terms of trade improve. For all the talk about krone weakness, its …
UK Parliament scheduled to vote on Withdrawal Agreement Bill (Tuesday, 19.00 BST) Euro-zone consumer confidence probably worsened in October (Wednesday, 15.00 BST) Central bank of Chile likely to cut its policy rate by 25bp (Wednesday, 22.00 BST) Key …
22nd October 2019
Ongoing protests in Chile unlikely to have much of an impact on financial markets UK government spending probably rose in September (09.30 BST) We estimate that retail sales in Canada picked up in August (13.30 BST) Key Market Themes The comparatively …
21st October 2019
UK Parliament’s vote on the new Brexit deal is likely to be very tight (Saturday) No policy changes likely at Draghi’s last meeting as ECB President (Thursday) Central banks in China, Turkey, Indonesia and Russia will probably cut rates Key Market Themes …
18th October 2019
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 will continue to struggle, but those in the euro-zone will …
China’s industrial production and retail sales probably recovered in September … … but we still think the economy slowed in Q3 as a whole (03.00 BST) Fed Clarida’s speech could shed some light on the probability of an October hike Key Market Themes Stock …
17th October 2019
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 the US, which is one reason why we expect Treasury bond …
Retail sales in the UK are likely to have fallen again in September (09.30 BST) We estimate that US manufacturing output fell by 0.5% in September … … but industrial production probably declined by less as utilities output jumped Key Market Themes So much …
16th October 2019
The Bank of Korea will probably cut its policy rate by 25bp (02.00 BST) UK inflation is likely to have rebounded a bit last month (09.30 BST) We estimate that US retail sales rose by 0.2% m/m in September (13.30 BST) Key Market Themes We think that …
15th October 2019
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 expectations, and doubt that Fed policy or a big …
The UK and EU will try to strike a Brexit deal at a summit ending on Thursday US manufacturing output probably slumped in September We expect the Bank of Korea to cut its policy rate on Wednesday Key Market Themes Equity and bond markets have remained at …
11th October 2019
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 to fare worst, in our view, while Indian equities hold …
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. While we think that the yield spread will stay low by past …
High-level trade talks between the US & China probably won’t lead to a comprehensive deal The central bank of Peru might cut its policy rate by 25bp, to 2.25% (00.00 BST) We think that consumer confidence in the US improved slightly in October (15.00 BST) …
10th October 2019
Even if US and China reach a partial trade deal this week, we doubt that it will last Account of ECB’s September meeting to highlight divisions among policymakers Latest round of tariffs probably drove US CPI inflation higher (13.30 BST) Key Market Themes …
9th October 2019
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 that the relative resilience of the Loonie so far this …
Fed Chair Jerome Powell might give hints about future path of interest rates Germany’s industrial production probably declined in August (07.00 BST) We think that US producer prices fell a bit last month (13.30 BST) Key Market Themes As the euro-zone …
7th October 2019
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. After rising by 5% in 2018, the US dollar has …
4th October 2019
FOMC minutes for September to shed some light on the Fed’s thinking (Wednesday) The account of the last ECB meeting may show the extent of division in the council (Thursday) US CPI probably jumped, as the latest tariffs on Chinese imports start to bite …
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 stock market will fall by the end of this year, as waning …
3rd October 2019
We don’t expect the valuations of US equities to continue to rise over the rest of 2019. In fact, we expect the price/earnings (P/E) ratio of the S&P 500 to fall, and this is a key reason why we forecast that the index will drop by about 15% from its …
UK services PMI likely to have dropped back in September (09.30 BST) We think that euro-zone retail sales fell again in August (10.00 BST) US ISM non-manufacturing index probably edged down only slightly last month (15.00 BST) Key Market Themes The recent …
2nd October 2019
Switzerland’s CPI inflation probably remained subdued in September (07.30 BST) We expect the policy rate to be cut in Iceland but remain unchanged in Poland US ADP’s measure of private-sector employment likely to be subdued (13.15 BST) Key Market Themes …
1st October 2019
RBA likely to cut its key policy rate by 25bp, to 0.75% (05.30 BST) We think that euro-zone headline inflation fell to about 0.8% in September (10.00 BST) The US ISM manufacturing index probably rebounded this month (15.00 BST) Key Market Themes While …
30th September 2019
The weakest balance sheets in the emerging world are concentrated in the Frontier Markets and, as a result, balance of payments crises occur more regularly. This lies behind Venezuela’s crisis, but also a growing inflation problem in Zimbabwe and (to a …
Chinese PMIs will probably show that the economy remains under pressure (Monday) RBA likely to cut its key policy rate by 25bp, to 0.75% (Tuesday) We expect a subdued 125,000 gain in US non-farm payrolls (Friday) Key Market Themes Euro-zone government …
27th September 2019
