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While the recent shift towards tighter monetary policy in many emerging markets (EMs) is likely to continue, this is largely priced in to markets already. But we think that local currency government bond yields will resume their rise in most cases …
28th September 2018
Italian bonds have come under renewed pressure after the government announced plans to loosen fiscal policy by more than markets anticipated over the coming years. We think that Italian bond yields will continue to trend higher as we expect the budget …
This report is only available as a PDF. Click to download. … What to make of the euro’s slide in the wake of Italy’s problems …
This report is only available as a PDF. Click to download. … BTPs to remain under pressure even if budget passes without fuss …
27th September 2018
Sovereign balance sheets in most of the large emerging economies are in reasonable shape, but those in a few of the smaller Frontier Market economies are very fragile. And investors’ concerns have ratcheted up in recent weeks. The political importance …
26th September 2018
This report is only available as a PDF. Click to download. … What future Fed policy is likely to mean for the markets …
The Japanese yen is the only “major” currency to have fared worse than the US dollar since the middle of August. Nonetheless, we think that its fortunes will improve against the greenback. Our forecast is that the exchange rate will drop back from around …
This report is only available as a PDF. Click to download. … Fed, rather than ECB, policy likely to boost the euro next year …
25th September 2018
This report is only available as a PDF. Click to download. … Worse to come for US corporate bonds in 2019 …
24th September 2018
This report is only available as a PDF. Click to download. … Too soon to sound the all-clear for global equity markets …
21st September 2018
Even though emerging market (EM) assets generally weakened again over the past month, and some have now fallen a very long way, we still forecast that there is considerably more pain to come. … Trouble for EM assets probably far from …
20th September 2018
This report is only available as a PDF. Click to download. … Peak in US Treasury yields may not be very far away …
This report is only available as a PDF. Click to download. … Relief for equities from trade concerns just a lull in the storm …
19th September 2018
Judging by what has happened in recent months, President Trump’s attitude to global trade could remain a more important driver of the US dollar than the prospects for monetary policy in the US and elsewhere. With this in mind, we might need to revise our …
This report is only available as a PDF. Click to download. … Faltering US dollar could be a sign of things to come …
18th September 2018
The fact that emerging market (EM) equities have dropped a long way recently does not mean that they cannot fall much further, or that they are likely to perform much better than their US peers in the future. … Will EM equities fall much …
This report is only available as a PDF. Click to download. … More pain to come for EM Asian equities …
17th September 2018
This report is only available as a PDF. Click to download. … 10-year Treasury yield likely to rise decisively above 3% soon …
14th September 2018
Ten years after the collapse of Lehman Brothers, there are concerns that the financial markets will bring the global economy to its knees again. We do not think, however, that they will be a major cause of the next recession, despite claims that the …
Although they have recovered a touch in the past couple of days, emerging market (EM) currencies have generally slumped against the dollar since mid-April. These falls shed light on which are most vulnerable in the next two years given the outlook for US …
13th September 2018
This report is only available as a PDF. Click to download. … Domestic monetary policy taking a back seat for euro and sterling …
This report is only available as a PDF. Click to download. … Risks to EM equities and currencies look quite different …
12th September 2018
This report is only available as a PDF. Click to download. … No respite around the corner for EM equities …
11th September 2018
This report is only available as a PDF. Click to download. … Rally in Italian government bonds unlikely to persist for long …
10th September 2018
This report is only available as a PDF. Click to download. … Friday’s sell-off in Treasuries is probably a sign of things to come …
7th September 2018
This report is only available as a PDF. Click to download. … EM currencies likely to weaken further, but risks unevenly spread …
6th September 2018
Worries about protectionism have clearly weighed on equity markets in much of the world recently, and this will probably remain the case. What’s more, we suspect that protectionism concerns will start to take a toll on the US stock market, which has …
This report is only available as a PDF. Click to download. … Outlook for equities is poor across the emerging world …
5th September 2018
Large-cap equities have generally continued to make headway in the US since the end of July, despite the fact that they have fallen in much of the rest of the developed world. Historically, equities in the US and other advanced economies have rarely moved …
4th September 2018
This report is only available as a PDF. Click to download. … Sterling buffeted by growing uncertainty about Brexit …
This report is only available as a PDF. Click to download. … US stock market unlikely to buck the global trend for long …
3rd September 2018
This report is only available as a PDF. Click to download. … Protectionism worries likely to hit equities harder before long …
31st August 2018
This report is only available as a PDF. Click to download. … Sustained recovery in sterling unlikely until next year …
30th August 2018
This report is only available as a PDF. Click to download. … Relief for EM currencies proves fleeting, more pressure to come …
29th August 2018
Frontier financial markets have endured a torrid 2018, but this hasn’t been accompanied by a deterioration in the hard activity data. Admittedly, growth in the largest frontier economy, Nigeria, slowed in Q2. But that was due to weakness in the oil …
Despite rising since January, emerging market (EM) corporate credit spreads remain very tight by past standards and relative to those of their counterparts elsewhere in the world. We think that this reflects cyclical, not structural forces, and expect …
This report is only available as a PDF. Click to download. … US-Mexico trade deal not the end of wider protectionism worries …
28th August 2018
This report is only available as a PDF. Click to download. … Treasury yield curve inversion is probably only a matter of time …
24th August 2018
This report is only available as a PDF. Click to download. … US stock market’s strength masks a sign of weakness …
23rd August 2018
The S&P 500 has not fallen by more than 20% since it began to climb after the last recession. As a result, the index has remained in a “bull market” that is about to become the longest ever, surpassing its winning streak before the dot com bubble burst in …
22nd August 2018
This report is only available as a PDF. Click to download. … Economics still matters more than politics for the S&P 500 …
This report is only available as a PDF. Click to download. … Rally in the S&P 500 to go into reverse before long …
21st August 2018
We suspect that, due to technical reasons, the ECB will increase its purchases of Italian government bonds in October. This might help to prevent yields from shooting up if Italy’s Government submits a very expansionary Budget to the European Commission …
This report is only available as a PDF. Click to download. … Monetary policy prospects to support the dollar until 2019 …
20th August 2018
The main factor weighing on EM assets recently has been worries about contagion from the crisis in Turkey. But even if these fears subside, there are plenty of other reasons to be pessimistic about the outlook. … Turkey’s crisis just one of many threats …
17th August 2018
This report is only available as a PDF. Click to download. … Peak in Italian bond yields probably a long way off …
This report is only available as a PDF. Click to download. … The future still looks bleak for China’s stock market …
16th August 2018
There is a widely-held view that the prices of many financial assets are bound to come crashing down sooner or later, because their valuations have risen far above the long-run averages to which they must inevitably revert. We think that this is bunkum, …
15th August 2018
This report is only available as a PDF. Click to download. … Respite for the Turkish lira doesn’t mean relief for other EMs …
This report is only available as a PDF. Click to download. … Why is gold so weak given the recent turmoil in Turkey? …
14th August 2018
