Despite being up 25% from December 2018 lows, Russ discusses the factors that remain supportive of the energy sector. With the S&P 500 Index up 15% year-to-date, it is no trivial thing to be “beating the market.” As a general
UBS House View, Investor's Guide “Begun the MMT Wars Have” declared a Bloomberg commentary earlier this month. Likening a debate about economic theory, Yoda-style, to the galactic conflict of Star Wars may seem stranger than science fiction. But the debate
Jeff explains that bonds appear to be back to playing their traditional role as diversifiers against stock downturns. But a look back in history reveals that inflation may be key to how well this relationship holds up in the future.
Rick Rieder and Russ Brownback argue that despite the market turbulence witnessed in the past several months, as well as a dramatic policy reversal, we find ourselves at a moment of remarkable economic stability. That fact, along with greater policy
In this issue Lessons from Illinois Sino-Nippon Trade Relations The Fed’s New Face(s)?
Multi-Asset Solutions Weekly Strategy Report The dovish shift from the Federal Reserve earlier this year has reverberated throughout the world, reflected not only in financial market performance but also in the stances of other central banks. What looked, at this
Fixed income markets are enjoying a good run with the Federal Reserve again, suggesting this week that rates are on hold for the foreseeable future. Brexit has been delayed and the economic data continues to look more like “goldilocks” than
Gianni Amisano and Oreste Tristani | We study the relationship between monetary policy and long-term rates in a structural, general equilibrium model estimated on both macro and yields data from the United States. Regime shifts in the conditional variance of
The recent yield curve inversion has many market watchers wondering whether recession is on the horizon. The corporate bond market tells a different story. The yield curve, which plots Treasury yields across the maturity spectrum, serves as an indicator for
Key points The first quarter of 2019 has been record-breaking in credit markets, with some surprising winners The dovish change in the European Central Bank’s policy outlook at its 7 March meeting boosted the performance of euro credi Fund flows
We are cautious on U.S. Treasuries in the short term after the recent rally. Yet we still advocate exposure to build portfolio resilience. Scott explains. U.S. Treasury yields dropped sharply in March, breaking out of the tight range they had
We were optimistic about a 2019 rebound in the US and in Emerging Markets, as described in our Dec/Jan Eye on the Market notes. But markets have now moved even higher than I expected. US equity valuations are well above
The US yield curve has inverted before every recorded recession over the last five decades1, however the spate of recent and unconventional monetary policy could potentially be rendering the barometer’s predicative powers obsolete. March 2019 saw the inversion of the
There have been some signs of global growth stabilising, although European data is lagging. China and the US published stronger data on manufacturing last week. Bond yields have risen a bit, suggesting recession fears have receded somewhat. This is a
Investment Strategy Insights Imagine being joined at the hip to China’s economy, having to ride its ups and downs, while at the same time being subject to Federal Reserve policy through a fixed peg to the US dollar. That’s the
Further Fed dovishness The global Nowcast (our big data analysis tool) remains below our sense of trend growth, although there are tentative signs of a stabilisation. US growth is still robust, with further evidence of rising wage pressures Our Nowcast
We see a repeat of the first-quarter rally as unlikely, and advocate more carefully balancing risk and reward as the second quarter kicks off. Richard shares three investing ideas for this quarter. Markets are off to a strong start in
With growth soft, financial conditions are key for investors, Russ explains. The first quarter has witnessed a spectacular equity rally, despite stalling in recent days. During the same period volatility has plunged. The VIX Index, a measure of S&P 500
What’s driving this rally? This rally is being driven by a combination of a dovish Federal Reserve, accommodative Chinese policies and signs of a trade war resolution, all of which appear to have revised investor sentiment. What does this mean
Richard lays out our views for the second quarter–including three refreshed investment themes. Global stocks have had a strong start of the year. Will the rally be sustainable? We see a repeat as unlikely and a narrower path for risk
The new year has brought with it a new wave of optimism, with equities and credit rallying strongly across the world. The sell-off in equities and credit in the final quarter of last year was caused predominantly by concerns about
Is the Fed too loose or too tight? Recent market behaviour suggests there is a belief that it is too tight. However, we continue to believe it is very accommodative and find support from the Taylor Rule (even when adapted
The US central bank moving towards the end of its balance sheet unwind Fed decides on floor system, paving way for balance sheet decision At the January Federal Open Market Committee (FOMC) meeting, the Federal Reserve (Fed) announced that it
Britain was supposed to have left the EU today. As you may have noticed, it hasn’t. The future remains uncertain, especially as there will be more political change. The real work will begin once the withdrawal has taken place but
Scenario probabilities (%) Source: J.P. Morgan Asset Management. Views are as of March 21, 2019. MARCH MADNESS Anyone in the U.S., or passing through this time of year, knows all too well about the collegiate basketball spectacle known as March
