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Although the US dollar has pulled back over the past fortnight, we expect it to strengthen once more against most major currencies in the second half of this year as the global economy slows. … Recent setback for the US dollar likely to be …
11th June 2019
This report is only available as a PDF. Click to download. … Real yields likely to rebound in the UK, pushing Gilt yields up …
The valuations of EM assets are not particularly low, which is one reason why we expect EM financial markets to suffer along with those elsewhere as the global economy disappoints in the coming quarters. … Valuations don’t make a compelling case for EM …
This report is only available as a PDF. Click to download. … Don’t misread the increase in China’s fx reserves …
10th June 2019
This report is only available as a PDF. Click to download. … Prospect of US rate cuts unlikely to keep S&P 500 rally going …
7th June 2019
We do not think that the valuations of equities are unsustainably high. Nonetheless, we still expect that stock markets in the US and in the rest of the developed world will slump later this year. This is because we anticipate earnings to come under …
This report is only available as a PDF. Click to download. … Monetary policy unlikely to push Bund yields further down …
6th June 2019
This report is only available as a PDF. Click to download. … Rate expectations shouldn’t undermine the dollar …
5th June 2019
This report is only available as a PDF. Click to download. … Gold has not lost its lustre after all …
4th June 2019
We think that corporate credit spreads in the US will continue to climb this year, as the economy there slows. Our forecast is for the spreads of speculative-grade bonds to rise by well over 100bp, on average, by the end of 2019. … US corporate credit …
This report is only available as a PDF. Click to download. … US stock market still an accident waiting to happen …
3rd June 2019
This report is only available as a PDF. Click to download. … DAX, FTSE MIB and Nikkei most exposed to auto tariffs …
31st May 2019
The spread between the yields of 10-year government bonds in Greece and Italy has fallen sharply following the latest European Parliament elections. We now forecast that it will turn negative, reflecting Italy’s comparatively poorer economic prospects, …
Sovereign dollar bond spreads widened much further in frontier markets than in other EMs over the past month on the back of concerns over fragile balance sheets. … Balance sheet fears escalate in frontier …
30th May 2019
This report is only available as a PDF. Click to download. … More upside for government bonds in Canada than elsewhere …
This report is only available as a PDF. Click to download. … Reassessing the rally in Treasuries …
29th May 2019
While it may appear as if the US stock and bond markets are sending mixed signals about the health of the economy, it is common for equity prices to remain high while Treasuries rally in anticipation of looser Fed policy. Nonetheless, the stock market’s …
The relationship between the renminbi and other emerging market currencies has strengthened in recent years. While the response to renewed US-China tensions has been limited so far, if the renminbi depreciates and risk sentiment sours further, we think …
Equities in Japan have underperformed those in other major developed markets since the start of 2018, owing to a stronger yen and weaker corporate earnings in particular. We expect this underperformance to continue over the rest of this year against …
This report is only available as a PDF. Click to download. … What to make of the market reaction to the EU elections …
28th May 2019
This report is only available as a PDF. Click to download. … Safe-haven flows, more than politics, likely to weigh on the euro …
24th May 2019
We think that EM sovereign dollar bonds will generally fare badly in 2019. But their correlations with US equities and Treasuries suggest that they will hold up better in parts of Asia and Latin America. … EM sovereign dollar bonds not all in the same …
The far superior performance of equities in the US than in the rest of the developed world since the global financial crisis (GFC) can be mostly attributed to healthier growth in corporate earnings. It owes little to a shift in their relative valuation. …
The yield of 10-year government bonds in Italy has moved in the opposite direction to the yields of 10-year government bonds in Spain and Portugal recently. While we don’t expect that to continue, we do think that their yields will continue to diverge …
23rd May 2019
This report is only available as a PDF. Click to download. … Gold likely to regain its lustre before the year is out …
This report is only available as a PDF. Click to download. … The US/China trade war doesn’t pose a big risk to Treasuries …
22nd May 2019
This report is only available as a PDF. Click to download. … Sterling still at the mercy of Brexit developments …
21st May 2019
This report is only available as a PDF. Click to download. … Equities in India may continue to outperform those in Asia …
20th May 2019
We suspect that the European Parliament (EP) elections will not cause much reaction on bond markets, even if populist parties perform even better than expected. Recent elections in the EU suggest that politics trigger sell-offs only when those parties …
This report is only available as a PDF. Click to download. … Aussie dollar may fall further, particularly against the yen …
17th May 2019
This report is only available as a PDF. Click to download. … Bund yields likely to stay negative for much longer than in 2016 …
16th May 2019
The 2% fall in the renminbi since the US-China trade war flared up again reflects market pressure more than a deliberate policy choice – Chinese policymakers have actually been trying to slow its slide. If trade talks break down entirely, they would have …
This report is only available as a PDF. Click to download. … BTPs likely to continue underperforming other peripheral bonds …
15th May 2019
Although the rebound in US equities since the Global Financial Crisis (GFC) contrasts starkly with their protracted slump after the Great Crash, it has been largely justified by a rebound in corporate profits that did not materialise then. This also …
Although equities in the euro-zone have fallen sharply in the past week as the US-China trade dispute has flared up again, they are still much higher than they were at the start of the year. This suggests that a lot of good news about trade is still …
This report is only available as a PDF. Click to download. … Renminbi still a casualty, not a weapon, in trade war …
14th May 2019
This report is only available as a PDF. Click to download. … Renewed curve inversion suggests slide in S&P 500 is not over …
13th May 2019
This report is only available as a PDF. Click to download. … Post-tariff bounce in China’s stock markets unlikely to last …
10th May 2019
We think the assumption in markets that looser policy in the US and China will revive the global economy before very long is too optimistic. We are forecasting further weakness, regardless of whether a trade deal between the two countries is ultimately …
This report is only available as a PDF. Click to download. … Safe havens likely to remain in demand regardless of trade deal …
9th May 2019
This report is only available as a PDF. Click to download. … Outperformance of US equities may be coming to an end …
8th May 2019
This report is only available as a PDF. Click to download. … US economy a bigger risk than renewed trade conflict to S&P 500 …
7th May 2019
While the average EM 10-year local currency sovereign bond yield has followed the equivalent US Treasury yield very closely recently, we doubt that this will last much longer. Indeed, we forecast that the Treasury yield will decline over the rest of 2019, …
We haven’t been surprised by this year’s rise in the US dollar’s value against other “majors”, despite investors’ dovish reassessment of the outlook for Fed policy. Despite its pull-back today, we forecast that the greenback will appreciate further this …
3rd May 2019
This report is only available as a PDF. Click to download. … Fed still likely to cut rates this year, pushing Treasury yields down …
We doubt that bond markets will be negatively affected by the European Parliament (EP) elections this month, as the rise of anti-EU parties is already widely anticipated and would not necessarily complicate EU policymaking. In fact, a strong showing by …
This report is only available as a PDF. Click to download. … Powell’s inflation talk doesn’t alter our bullish view of Treasuries …
2nd May 2019
This report is only available as a PDF. Click to download. … Dovish Fed unlikely to sustain S&P 500 rally …
1st May 2019
Aggregate frontier market GDP growth probably slowed to its weakest pace since early 2017 in Q1 and, while we think that this should mark the bottom of the cycle, activity in most frontiers will remain sluggish over the next couple of years. … Growth in …
30th April 2019
This report is only available as a PDF. Click to download. … Investors still banking on an unlikely revival in China’s economy …
