The Federal Reserve lowered its target policy rate for the first time in over a decade, ending one of the longest hiking cycles in the past 30 years. While the cumulative increase in the federal funds rate of 225 basis
Core government bond yields continued their lurch lower as volatility remained elevated, driven by further escalation in trade rhetoric and the unexpected re-fixing of the Chinese yuan fix to above 7. This retaliatory action led the US Treasury to formerly
Markets struggled to regain their calm although the risk of Chinese currency manipulation abated. Fundamental worries over an economic slowdown -with its litany of negative interest rates and yield curve inversion – returned to haunt investors. Second quarter results were
What happened in the past month? High frequency data points to retreat in both IP and retail sales growth in July. Property and land markets soften. July IPP coal consumption growth declined to -16% YoY from -10% YoY in June.
The U.S./China Trade Conflict. On this front, we have been assuming provocation would eventually give way to negotiation. The issues between the two countries are numerous and complicated, but we have been assuming that economic and political forces would lead
A Long, Hot Summer The trade truce between China and the United States was short-lived. In a flurry of economic news following a fruitless negotiation round, the United States threatened new tariffs on all imports from China; China cancelled U.S.
Index Dashboard: Europe
After an exceptionally strong start to the year, financial markets paused for breath in July, with most asset classes delivering muted returns. The Federal Reserve (the Fed) lowered US interest rates for the first time in 11 years, and the
Outlook and Review Central Banks Counter Rising Geopolitical Risk with a Healthy Dose of Liquidity Economic Outlook Global growth conditions are currently among the weakest since the financial crisis, and leading indicators show no signs of a turnaround yet (Chart
Central banks once again remained centre stage. Judging from falls in the euro and European sovereign bond yields, investors were clearly expecting big developments over the week. And yet the ECB meeting raised more questions than answers. True, the ECB
The first estimate for 2Q19 real GDP growth came in at 2.1%, a little stronger than the consensus expectation of 1.9%. Real government spending, which grew at 5% annualized in the second quarter, and real consumer spending, which grew at
Unconvincing results and fresh US-China tensions leave investors hesitant. The US economy remained buoyant thanks to strong consumer spending. Retail sales were underpinned by a 4% lift to wages and falling oil prices (as tensions with Iran abated and fears
While we expect the ECB to formally adopt an easing bias at its policy meeting later this week, we believe a 5-10 bps cut to the central bank’s deposit rate—along with revisions to its macro forecasts—won’t occur before September. And
The New York Fed clarified comments by leader John Williams, causing a dramatic swing in expectations for a July Fed rate cut of 0.50%. The European Central Bank may provide easing details on Thursday. U.S.-Iran tensions and U.S. President Donald
Bumpy Road Ahead For The U.S. Auto Industry Germany’s Motor Is Sputtering Chinese Auto Sales Are Stuck in Reverse
Global equities extended their 2019 gains into the second quarter, but with substantial volatility. Trade tensions — re-ignited by the threat of tariffs on essentially all US imports from China, the US government’s designation of Chinese telecommunications giant Huawei as
WEEKLY MARKET OUTLOOK The release of second quarter corporate earnings is moving into full gear and investors are not entirely happy with the results. In addition to stumbling share prices, the latest jump in the implied probabilities of a lower
After weeks of relative stability, the threat of a trade war has returned, shaking investor confidence and awakening markets from complacency. However, while there is still a significant optimism in the market that a deal can be struck, we believe
We assess the impact of the corporate sector purchase programme (CSPP), the corporate arm of the ECBís quantitative easing, over its Örst year of activity (June 2016 ñ June 2017). Focusing on the primary bond market, we Önd evidence of
Monthly Commentary | June 2019 On the surface, I am surprised this most recent correction was so muted:
Market flash Meanwhile, the European Union made a number of senior appointments. After lengthy negotiations, a reflection of Europe’s very politically diverse nature, Ursula von der Leyen was put forward as European Commission president while Christine Lagarde was proposed as
Multi Asset Monthly Despite the trade truce between the US and China concluded during the G20, there is still a considerable risk that the lingering uncertainty will continue to dampen business confidence and capex spending. To the extent that this
Market Review In June, the central banks came to the rescue. Confronted by weaker economic data, risks to the trade outlook and still low inflation, the Federal Reserve (the Fed) and the European Central Bank (ECB) indicated that the cavalry
The S&P/LSTA Leveraged Loan Index (the “Index”) slipped 6 basis points (“bps”) for the seven day period ended June 27, led lower by a 17 bps reduction in the average Index bid, to 96.80.
We review trends across markets and economies in Q2 2019, consider what they mean for our multi-asset portfolios and present a positioning update. The second quarter of 2019 brought largely negative news on the U.S.-China trade front, a corresponding dovish
