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As we noted in our Global Markets Update , “How do the valuations of US and European equities stack up?”, which was published on Monday, the stock market in the US can be considered either to be overvalued or undervalued compared to its counterpart in …
26th May 2016
This report is only available as a PDF. Click to download. … Digging deeper into US and European stock market valuations …
The renewed slide in the renminbi against the US dollar may revive concerns about a broad-based devaluation of the Chinese currency. However, as we have argued before, context is everything, and here the context is the resumption of the dollar’s climb …
25th May 2016
This report is only available as a PDF. Click to download. … How will EM currencies handle the Fed? …
Emerging market (EM) currencies have not always underperformed during Fed tightening cycles and we do not expect them to do so this time, even as US rates rise further than is generally anticipated … Will EM currencies underperform as the Fed …
While investors are still probably underestimating the future pace of monetary tightening in the US, we suspect that relatively low valuations will help to ensure that emerging market (EM) equities perform well in the next eighteen months. … Valuations …
24th May 2016
This report is only available as a PDF. Click to download. … How has the demand for Treasuries changed? …
This report is only available as a PDF. Click to download. … Will the US dollar continue to recover? …
23rd May 2016
The trends in the opinion polls and in bookmakers’ odds suggest that a UK vote to leave the EU (“ Brexit ”) would now be a major surprise. Given this, the initial uncertainty caused by Brexit would probably boost the prices of safe havens, including …
Is the stock market in the US overvalued or undervalued relative to its counterpart in Europe? The answer largely depends on which metric is chosen and how earnings evolve. … How do the valuations of US and European equities stack …
This report is only available as a PDF. Click to download. … How do the valuations of US and euro-zone equities compare? …
20th May 2016
This report is only available as a PDF. Click to download. … Will markets take the resumption of US rate hikes in their stride? …
19th May 2016
Our central forecast is that US interest rates will be raised twice this year, probably in September and December, but we suspect that the chances of a hike on 15th June are rather higher than the 30% currently priced into the market. What’s more, …
Low commodity prices, slower growth and a string of elections have prompted a move towards reform in a handful of frontier market economies in recent months. But while these governments have made impressive starts, much of the hard work is still to be …
US Treasury yields continue to be depressed by other forces besides the expectation that the federal funds rate will remain very low in the future. Some of these forces are likely to persist over the next year or two. Nonetheless, we doubt they will …
18th May 2016
This report is only available as a PDF. Click to download. … Will US Treasury yields stay low again, despite Fed tightening? …
We now think that the 10-year US Treasury yield will rise by about 100bp in 2017. Nonetheless, unlike previous occassions when it has risen sharply, we doubt that it will lead to a crisis in emerging markets (EMs). … Will rising Treasury yields rattle EMs …
17th May 2016
This report is only available as a PDF. Click to download. … Should EMs fear rising US Treasury yields next year? …
After staging a decent recovery this year, almost all EM currencies have weakened against the US dollar so far this month. Some may weaken a little further, but we think a large sell-off is unlikely. … What’s going on with EM …
The real trade-weighted value of the US dollar remains well above its average and trend levels of the last ten years. This suggests that the currency may still be fundamentally overvalued after its slide this spring. Furthermore, the IMF recently …
16th May 2016
This report is only available as a PDF. Click to download. … Will 2017 be a worse year for US Treasuries than 2016? …
While we continue to expect the FOMC to hike the federal funds rate by 25bp at least twice this year, two such increases are currently anticipated by investors in the bond market . We are therefore cutting our end-2016 forecast for the 10-year US …
This report is only available as a PDF. Click to download. … Market turmoil following “Brexit” may be much less than feared …
13th May 2016
Financial markets in Latin America have comfortably outperformed the rest of the emerging world in the past month. But with rising commodity prices unlikely to offer much more support, we doubt that they will remain the shining star in the months ahead. …
12th May 2016
This report is only available as a PDF. Click to download. … Will oil continue to outperform? …
This report is only available as a PDF. Click to download. … Will impeachment in Brazil unleash another big rally? …
11th May 2016
This report is only available as a PDF. Click to download. … On the relative prospects for bonds in the US and elsewhere …
10th May 2016
This report is only available as a PDF. Click to download. … What next for US corporate bonds? …
9th May 2016
This report is only available as a PDF. Click to download. … What to make of April’s US Employment Report? …
6th May 2016
Although the US stock market has rebounded in the past few months as the news from China has improved and the dollar has weakened, we doubt it will power ahead for three key reasons. First, we expect profits in the US to be squeezed as the labour market …
5th May 2016
This report is only available as a PDF. Click to download. … The weakness of the Turkish lira is probably far from over …
This report is only available as a PDF. Click to download. … EM equities: time to call Mayday? …
4th May 2016
The strong performance of non-investment grade (or “junk”) dollar-denominated government bonds in recent weeks has driven the yield premium over investment grade bonds down to 360bp, a level rarely seen since the 2013 “taper tantrum”. But with little …
This report is only available as a PDF. Click to download. … Will the US dollar’s slide end any time soon? …
3rd May 2016
This report is only available as a PDF. Click to download. … Would further US labour market strength be good for the S&P 500? …
29th April 2016
Our view is that monetary policy will be tightened by more than investors assume in the US, but typically be at least as loose as they envisage elsewhere. We therefore expect to see a significant rise in the yields of long-term US Treasuries, but only …
28th April 2016
This report is only available as a PDF. Click to download. … Will EM petro-currencies continue to outperform? …
This report is only available as a PDF. Click to download. … More to relative equity performance than currency fluctuations …
27th April 2016
This report is only available as a PDF. Click to download. … How will the contrast in Fed and BoJ policies affect the markets? …
26th April 2016
This report is only available as a PDF. Click to download. … China’s credit growth is a concern, but not a crisis …
25th April 2016
This report is only available as a PDF. Click to download. … Are Argentine bonds really that attractive? …
22nd April 2016
A number of frontier markets have turned to the IMF for financial support over the past few months in order to counter strains in their balance of payments. Angola has formally opened negotiations with the Fund, becoming the first major EM oil producer to …
This report is only available as a PDF. Click to download. … ECB policy should help to weaken the euro in time …
21st April 2016
The recovery in oil prices has now taken Brent above our end-2016 forecast of $45 per barrel. We would not be surprised to see the rally pause for breath soon, but remain comfortable with our view that prices will recover further – to around $60pb – by …
The IMF was at pains to highlight the threat of capital outflows from emerging markets (EMs) in the April edition of its World Economic Outlook . But the recent rally in EM financial markets seems to have been influenced by the return of foreign buyers. …
The recent weakness of the dollar has provided a boost to the US stock market which we do not expect to last. Admittedly, we do not anticipate another big increase in the US currency’s trade-weighted value. So the performance of US equities should not …
20th April 2016
This report is only available as a PDF. Click to download. … How will the dollar affect the US stock market? …
The US stock market has fared well over the past month, with the S&P 500 now not far below its record high. Admittedly, many observers continue to predict that the index will slump again at some point soon because its valuation is unsustainably high. …
19th April 2016
This report is only available as a PDF. Click to download. … What does China’s currency policy imply for the US dollar? …
This report is only available as a PDF. Click to download. … Why didn’t Brazilian markets rally more? …
18th April 2016
