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This report is only available as a PDF. Click to download. … Falling inflation in the euro-zone to trigger full-blown QE soon …
27th November 2014
This report is only available as a PDF. Click to download. … China’s interest rate cut not a major boost for EM equities …
26th November 2014
While we are still not convinced that the euro-zone is the new Japan, despite the many similarities in their economic predicaments, we are increasingly of the view that the 10-year Bund yield will remain exceptionally low for at least the next couple of …
25th November 2014
This report is only available as a PDF. Click to download. … German Bund yields are likely to remain very low …
This report is only available as a PDF. Click to download. … Will the US stock market run out of steam? …
24th November 2014
This report is only available as a PDF. Click to download. … ECB’s Draghi provides more hints that “full-blown” QE is coming …
21st November 2014
There have been three episodes in the past twenty years when the yen has rebounded substantially following a sustained period of depreciation. In each case, the trigger was an increase in financial market volatility. Yet while volatility is currently low …
20th November 2014
This report is only available as a PDF. Click to download. … Will the yen remain in free fall? …
This report is only available as a PDF. Click to download. … Is the gold price set to benefit from European central bank buying? …
19th November 2014
The gap between cyclically-adjusted price/earnings ratios (CAPE) for the non-financial sectors of the US and euro-zone stock markets – using Shiller’s method – has climbed from below zero in May 2008 to a current level of more than eleven, which is the …
It is tempting to think that a further sharp fall in Japan’s currency would prompt policymakers in the rest of Asia to try to weaken their own in an effort to maintain their competitiveness. But there are several reasons why we don’t expect a wave of …
This report is only available as a PDF. Click to download. … What would further yen weakness mean for other Asian currencies? …
18th November 2014
This report is only available as a PDF. Click to download. … Yen to fall a lot further as monetary policies diverge …
17th November 2014
Japan’s drop back into recession will strengthen the disinflationary pressures in the economy and reinforces the divergence in the prospects for monetary policy relative to those in the US. As a result, we now expect the yen to fall to 140 against the …
This report is only available as a PDF. Click to download. … How vulnerable are EM equities to the plunge in the price of oil? …
14th November 2014
The performance of equities has been lacklustre in emerging markets since the end of September and noticeably worse than in developed markets. As a result, the return so far this year from the MSCI Emerging Markets Index in dollar terms has been less than …
13th November 2014
This report is only available as a PDF. Click to download. … Sterling’s decline against the dollar is probably not over …
While the decline of nearly 30% in the price of oil since 20th June ought to boost the US economy, we think the muted reaction in the stock market – the S&P 500 has gained only 4% – makes sense. … Why is cheaper oil not boosting the S&P 500 …
12th November 2014
This report is only available as a PDF. Click to download. … Ukraine crisis still a bigger risk to Russia than elsewhere …
This report is only available as a PDF. Click to download. … Abe government playing a risky game …
11th November 2014
While the slump in oil prices will reduce inflation in the major economies, it should also boost economic growth – at least where inflation is not dangerously low to begin with. The net effect on government bond yields therefore depends on several factors …
This report is only available as a PDF. Click to download. … The outlook for Japan’s stock market remains bright …
10th November 2014
Japanese equities have paused for breath following the surge in the wake of the additional easing announced by the Bank of Japan and the reweighting of the government pension fund in favour of stocks. Even after the rapid run-up in recent weeks, we expect …
This report is only available as a PDF. Click to download. … US labour market remains in fine fettle …
7th November 2014
This report is only available as a PDF. Click to download. … Will corporate profits continue to buoy the S&P 500? …
6th November 2014
This report is only available as a PDF. Click to download. … Global equity markets should learn to love lower oil prices …
5th November 2014
The S&P 500 has recovered from a major wobble in October and recently posted another record high. That being said, we don’t think the strong performance is likely to last. The value of the US stock market will probably grow more slowly than the economy in …
4th November 2014
This report is only available as a PDF. Click to download. … Has the bubble in Treasuries begun to deflate? …
Although the US stock market has rebounded in recent weeks, one development that could cap its upside is a further rally in the dollar. A strengthening currency causes exporters to lose market share unless they cut their margins, and undermines the …
This report is only available as a PDF. Click to download. … Will a stronger dollar undermine the US stock market? …
3rd November 2014
If recent history is any guide, Fed tightening is unlikely to derail stock markets to the extent that many fear. Our view is that while US equities will struggle to make further headway, they will largely shrug off more restrictive monetary policy at …
31st October 2014
This report is only available as a PDF. Click to download. … Russia seeks to stabilise the ruble …
So much for the end of QE! The Bank of Japan’s announcement today that is stepping up its asset purchases is a timely reminder that not everyone has to follow the Fed. We would be wary of speculation that an outflow of Japanese money will lift bond …
This report is only available as a PDF. Click to download. … US economy continuing to leave euro-zone far behind …
29th October 2014
Equities in emerging markets have fared poorly since the end of September, dragging down the price/12m forward earnings ratio in most regions to below its 5-year average, with the exception of Latin America. On this measure, valuations of equities in …
28th October 2014
This report is only available as a PDF. Click to download. … Fed to end asset purchases, but likely to retain dovish rate guidance …
The widely anticipated completion of the Fed’s purchases under QE3 need not mark the end of the policy’s support for global asset prices. As it happens, QE3 was not much of a boon to emerging markets or commodities – including gold – in the first place. …
This report is only available as a PDF. Click to download. … Ebola fears understandable, but global risks still appear small …
27th October 2014
This report is only available as a PDF. Click to download. … Brazil’s markets wait on election result …
24th October 2014
Net inflows into global ETF and mutual funds in September were at their lowest level since March, when there was last an outflow. While this was due in part to a continued small outflow from funds that invest in bonds, foreign flows into funds that invest …
23rd October 2014
This report is only available as a PDF. Click to download. … What do the PMIs tell us about the prospects for equities? …
This report is only available as a PDF. Click to download. … Are emerging market corporate bonds undervalued? …
22nd October 2014
The average yield spread of 10-year Italian and Spanish sovereign bonds over German Bunds has surged by almost 20 basis points over the past month. We suspect that it may rise further. One reason for this is that the spread remains lower than that of …
This report is only available as a PDF. Click to download. … Why is the UK stock market doing so badly? …
21st October 2014
This report is only available as a PDF. Click to download. … The bubble in “junk” bonds appears to be deflating …
20th October 2014
This report is only available as a PDF. Click to download. … When will the bubble in bonds burst? …
17th October 2014
This report is only available as a PDF. Click to download. … Why the correction is unlikely to turn into a bear market …
16th October 2014
There are, of course, plenty of reasons why the performance of equities can decouple from that of the economy. But the recent slump in stock prices does not appear to be justified by the economic data alone, especially given the boost that cheaper oil …
This report is only available as a PDF. Click to download. … Slump in bond yields hard to square with economic reality …
15th October 2014
Although the spread between the yields of 10-year US Treasuries and German Bunds is already close to its largest since the start of European Monetary Union, we see little reason why it should not continue to grow by another percentage point or so given …
14th October 2014
