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The rout in the US bond market since the elections there is a logical response to the prospect of a substantial fiscal expansion. Indeed, the results have prompted us to revise up our already-bearish forecasts for Treasury yields. Although we have also …
15th November 2016
This report is only available as a PDF. Click to download. … No need to panic over bond sell-off …
The slump in emerging markets (EMs) since Donald Trump pulled off the shock of the century has so far been relatively mild, and we are not making wholesale changes to our forecasts. Trump’s victory increases the likelihood of the sell-off in …
In the wake of Donald Trump’s victory in the US presidential election, we are nudging up our forecasts for government bond yields in Europe. But we still don’t expect that they will rise as fast as in the US. … Will European bonds fare better than US …
14th November 2016
This report is only available as a PDF. Click to download. … Will European bond yields follow US Treasuries higher? …
This report is only available as a PDF. Click to download. … We expect the sell-off in the US Treasury market to continue …
11th November 2016
We are revising our forecasts for US Treasuries in response to the possibility of a large fiscal stimulus under a Trump administration. We are, however, retaining our forecasts for the S&P 500. … New – even more bearish – forecasts for …
Financial markets in Mexico have slumped since Donald Trump’s victory in the US presidential election was confirmed on Wednesday, but losses in many other emerging markets (EMs) have so far not been particularly alarming. Nonetheless, with the outlook for …
This report is only available as a PDF. Click to download. … Is the US stock market banking too much on Trump? …
10th November 2016
This report is only available as a PDF. Click to download. … Why were markets so quick to shrug off Trump’s victory? Capital …
9th November 2016
The initial reaction in the markets to Donald Trump’s victory has not been as large as we expected and many of the moves have now been largely unwound. Nonetheless, the rebounds that we have seen are broadly consistent with our medium-term forecasts. … …
This report is only available as a PDF. Click to download. … What would a Trump victory mean for the markets? …
8th November 2016
A victory for Hillary Clinton in today’s presidential election is now heavily discounted. As a result, it would trigger far less of a response in the markets than a surprise win for Donald Trump. In this Update, we provide some specific forecasts in the …
Whoever wins the US presidential election, the recent uneven performance of the US dollar is likely to continue. If – as seems increasingly likely – Hillary Clinton emerges victorious, we would expect the US dollar to rise a little in trade-weighted …
7th November 2016
This report is only available as a PDF. Click to download. … Clinton rally or Trump sell-off likely to be short-lived …
This report is only available as a PDF. Click to download. … What to make of the US dollar’s recent performance …
4th November 2016
This report is only available as a PDF. Click to download. … Sterling’s resurgence unlikely to go much further …
3rd November 2016
Euro-zone government bond yields have been on the rise recently. This partly reflects a less dovish outlook for ECB policy. As it happens, we don’t think that the ECB will scale back its stimulus in the near term, which should contain the yields of …
2nd November 2016
The consensus is that a victory for Donald Trump in next Tuesday’s presidential election would deal a lasting blow to the US stock market. Our sense, though, is that the performance of the S&P 500 would be a bit like that of the FTSE 100 in the wake of …
This report is only available as a PDF. Click to download. … How would a Trump victory affect US equities? …
This report is only available as a PDF. Click to download. … More good news from China largely priced in? …
1st November 2016
After seasonal adjustment, house prices on the Core-Logic measure jumped by 1.4% m/m in September. That reading will almost certainly be revised down next month, but even so it is clear that house price growth is accelerating. Sellers have been able to …
It is often argued that asset prices have been driven up by exceptionally loose monetary policy and that they are bound to come crashing down once central banks start to raise real interest rates back towards their historical levels. However, we are not …
31st October 2016
This report is only available as a PDF. Click to download. … Would EM currencies underperform if Trump won? …
Emerging market (EM) currencies have been stable in recent months, even as the likelihood that the Fed will tighten policy in December has grown. This supports our view that EM currencies will take higher US rates in their stride. … How will EM currencies …
Saudi Arabia’s successful international bond sale earlier this month has eased concerns about the sustainability of its currency peg, but exchange rates in other frontier oil exporters remain in the spotlight. The Kingdom’s US$17.5bn issue was a record …
This report is only available as a PDF. Click to download. … Will the sell-off in bonds continue? …
28th October 2016
This report is only available as a PDF. Click to download. … What do the UK GDP data mean for the markets? …
27th October 2016
This report is only available as a PDF. Click to download. … What’s behind the resilience of EM currencies? …
26th October 2016
Emerging market (EM) currencies have decoupled from broader movements in the US dollar in recent months despite a growing sense that the Fed will hike rates again before year-end. A realisation that the Fed will tighten further than is currently …
This report is only available as a PDF. Click to download. … Renminbi to continue its gradual decline against the dollar …
25th October 2016
The rally in emerging market (EM) “junk” bonds has continued unabated in recent days, but we think that this year’s strong gains may soon go into reverse. That alone would probably be enough to cause the stripped spread of the JP Morgan EMBI Global to …
This report is only available as a PDF. Click to download. … US dollar set for further gains …
24th October 2016
Although sterling has fallen a long way since the vote for Brexit, the IMF’s latest forecasts for the UK’s current account balance suggest that there is no fundamental reason for it to bounce back sharply. … Is sterling now “fair” …
21st October 2016
This report is only available as a PDF. Click to download. … Should EM investors fear low volatility? …
This report is only available as a PDF. Click to download. … What next for the markets? …
20th October 2016
We expect risky assets to fare well in 2017/18, even as the yields of US Treasury bonds continue toclimb in response to tighter-than-expected Fed policy. We think the stock market in the US will only grind higher as labour costs there increase, but …
19th October 2016
This report is only available as a PDF. Click to download. … Global growth to pick up slightly, led by EMs …
Following the implementation of new US money market regulations on Friday, US interbank rates might fall back a bit. While this could prompt some renewed demand for long-term Treasuries from foreign investors who hedge their currency exposure, we still …
18th October 2016
This report is only available as a PDF. Click to download. … How will new money market rules affect demand for Treasuries? …
This report is only available as a PDF. Click to download. … Headline inflation on the rise in both the US and UK …
17th October 2016
This report is only available as a PDF. Click to download. … Sterling’s Marmite fall now looks overdone …
14th October 2016
This report is only available as a PDF. Click to download. … How vulnerable are EM equities to developments in China? …
13th October 2016
This report is only available as a PDF. Click to download. … Fed, not high valuations, is key near-term threat to EM equites …
12th October 2016
The Mexican peso and South African rand have been buffetted by political developments in recent weeks, as Donald Trump continued to take aim at Mexico and South Africa’s Finance Minister was charged with fraud. … Political risks hit Mexican peso and …
11th October 2016
This report is only available as a PDF. Click to download. … Rebound in oil prices is a mixed blessing …
This report is only available as a PDF. Click to download. … US dollar likely to fall against other major currencies if Trump wins …
10th October 2016
The heightened economic and geopolitical uncertainty that would follow a victory for Donald Trump in November’s US presidential election would surely see the dollar weaken against traditional safe havens such as the Japanese yen, and the price of gold …
Since the UK’s vote to leave the EU, the shares of medium- and large-sized companies have fared better in the UK than in many other advanced economies, owing to the slide in sterling. In common currency terms, though, they have generally fared worse in …
7th October 2016
