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This report is only available as a PDF. Click to download. … A cautionary (but still positive) note on Japanese equities …
11th July 2016
This report is only available as a PDF. Click to download. … Doves rule the roost despite strong US payrolls …
8th July 2016
This report is only available as a PDF. Click to download. … Markets take China’s ‘stealth’ devaluation in their stride Capital …
7th July 2016
The UK’s decision to leave the EU caused a momentary wobble in emerging market (EM) currencies, but many are now stronger against the US dollar than they were one month ago. Commodity currencies have performed particularly well and may continue to do so. …
6th July 2016
The renewed slide in the value of the pound yesterday has prompted fresh jitters in global financial markets, as well as increased demand for traditional safe havens such as gold and the yen. But while sterling’s exchange rate is clearly a decent …
Perhaps surprisingly, the shares of medium- and large-sized companies fared better in the UK than in the US, the euro-zone and Japan, in the aftermath of the vote for Brexit. Much of this outperformance was fuelled by the weakness of sterling, which …
5th July 2016
This report is only available as a PDF. Click to download. … Sterling likely to fall further (which would be no bad thing) …
This report is only available as a PDF. Click to download. … Rebound in EM equities set to continue …
4th July 2016
British politics remains in turmoil following the vote for “Brexit”, but emerging market (EM) equities do not. There are likely to be more periodic sell-offs in risky assets in the months ahead, but we do not expect these to prevent EM stocks from …
This report is only available as a PDF. Click to download. … Will H2 2016 be as kind to UK financial assets as H1? …
1st July 2016
The past month has brought aggressive monetary easing in a handful of frontier markets, and we think others will follow suit over the rest of this year. Cuts in policy interest rates this month in Ukraine and Argentina, of 150bp and 450bp respectively, …
30th June 2016
This report is only available as a PDF. Click to download. … Why the recovery in the markets and what next? …
Our existing market forecasts were premised on an assumption that the UK would vote to remain in the EU. After the vote to leave, we have allowed the initial dust to settle, reviewed our projections and made some significant changes to our forecasts …
There are several plausible reasons why the prices of equities and other riskier assets have recovered after the UK’s vote to leave the EU. Some of these may be temporary, notably short covering. More positively, though, we think that the markets are …
The markets are probably right to price in additional policy easing from the Bank of England and the ECB in the wake of the UK’s vote to leave the EU (‘Brexit’). However, the consensus is almost certainly wrong in expecting the Fed to respond by keeping …
29th June 2016
This report is only available as a PDF. Click to download. … Brexit shouldn’t be a game-changer for the Fed …
This report is only available as a PDF. Click to download. … How much of a lift will a weaker currency provide to UK equities? …
28th June 2016
Sterling’s slide in the aftermath of the UK’s vote on EU membership is reminiscent of its slump after the country withdrew from the European Exchange Rate Mechanism (ERM) in 1992. Not surprisingly, though, the performance of UK equities has initially been …
This report is only available as a PDF. Click to download. … How dramatic are recent market moves? …
27th June 2016
While some equity indices fell further on Friday than on the day after the bankruptcy of Lehman Brothers, it would be wrong to conclude that the world is on the cusp of another global financial crisis (GFC). Indeed, even sterling’s slump against the …
This report is only available as a PDF. Click to download. … Will the calm continue after the UK’s vote for a “Brexit”? …
24th June 2016
Not surprisingly, the outcome of yesterday’s referendum in the UK has hit sterling hard and driven down the prices of equities and most commodities. At the same time, it has boosted the “safe-haven” appeal of the yen, high-grade government bonds and gold. …
The yen would presumably jump on safe-haven demand in response to a UK vote to leave the EU, but we would still expect the Japanese currency to end the year much weaker against the dollar. Indeed, even after a vote for Brexit, the yen could soon be …
22nd June 2016
This report is only available as a PDF. Click to download. … The wait is over – will the UK vote to leave or stay in the EU? …
This report is only available as a PDF. Click to download. … Would a “Brexit” lead to a rout in emerging market currencies? …
21st June 2016
This report is only available as a PDF. Click to download. … Fading Brexit fears to return the focus to the Fed, and China …
20th June 2016
This report is only available as a PDF. Click to download. … How will the UK’s vote on EU membership affect the markets? …
17th June 2016
The bears’ argument that the valuation of the US stock market is unsustainably high is typically made by comparing the current level of Shiller’s cyclically-adjusted price/earnings ratio (CAPE) for the S&P Composite, which is around 26, with its …
There are good reasons to believe that the market fireworks after a UK vote to leave the EU (‘ Brexit ’) would not be as dramatic as many expect. Indeed, while the initial impact on the pound would almost certainly be negative, there are several factors …
16th June 2016
This report is only available as a PDF. Click to download. … Three reasons not to panic over ‘Brexit’ …
This report is only available as a PDF. Click to download. … Fed inaction unlikely to last long …
15th June 2016
In our view, the equilibrium price/earnings ratio of the US stock market is now much higher than its long run average. Indeed, we think it is close to its current cyclically-adjusted level. If we are right, a slump in equity prices is far from …
14th June 2016
This report is only available as a PDF. Click to download. … How low will global bond yields go? …
This report is only available as a PDF. Click to download. … Brexit would still be a surprise to markets, despite latest polls …
13th June 2016
This report is only available as a PDF. Click to download. … Are resurfacing global growth fears causing bond market rally? …
10th June 2016
Financial markets in the emerging world have rallied in recent weeks as disappointing US employment figures for May caused investors to trim their expectations for the future pace of Fed tightening. Emerging markets (EMs) are likely to suffer bumps along …
9th June 2016
This report is only available as a PDF. Click to download. … The global fall-out from a vote for Brexit …
This report is only available as a PDF. Click to download. … Will the 10-year German Bund yield turn negative? …
8th June 2016
Several factors have probably reduced the equilibrium level of the equity risk premium (ERP) in the US to a level that is well below its long-run average. Partly as a result, the stock market is unlikely to be anywhere near as overvalued as the bears …
7th June 2016
This report is only available as a PDF. Click to download. … Another reason why the US stock market is not hugely overvalued …
The latest US Employment Report has dealt the dollar a fresh blow, after its much-improved performance during most of May. Our view, however, is that the currency’s latest fall will be more than reversed. … The future still looks bright for the US …
6th June 2016
In contrast to equities in developed markets, those in emerging markets (EMs) have rallied since Friday’s disappointing US Employment Report caused investors to scale back their expectations for Fed tightening. We continue to expect the federal funds …
This report is only available as a PDF. Click to download. … EM equities buoyed by soft US Employment Report …
3rd June 2016
This report is only available as a PDF. Click to download. … Fed, Brexit, China – which is the biggest threat to EMs? …
2nd June 2016
The wobble in financial markets in the emerging world since investors began to reassess the outlook for US monetary policy in May has been much smaller than in the past. The Fed, along with renewed concerns about China’s economy or even a vote for the UK …
This report is only available as a PDF. Click to download. … Which currencies are fundamentally overvalued? …
1st June 2016
The Peterson Institute for International Economics (PIIE) recently published its latest semi-annual estimates of fundamental equilibrium exchange rates (FEERs). These suggest that the Colombian peso, Turkish lira and South African rand are the most …
This report is only available as a PDF. Click to download. … Should we worry about China’s “A-shares” and the MSCI? …
31st May 2016
Were China’s “A-shares” to be included in the MSCI Emerging Markets Index it may not be the big deal that some expect. A-shares would probably only be dripped into the Index, while the outlook for Chinese equities is not as bright as it once was. … Will …
This report is only available as a PDF. Click to download. … What explains the contrast in Indian and Brazilian equities? …
27th May 2016
