Outlook 2022: As we head into a new year, it’s clear in hindsight that the market downturn of 2020 was short-lived and entirely related to the COVID-19 outbreak. In my view, that means the powerful upswing in equity prices since
Disappointing US dollar bond returns in EM local currency debt has led to a decline in flows into the asset class over the past decade. In this paper, we discuss the key reasons to invest in EM local currency debt, some of the factors behind the recent weakness in the asset class returns and prospects for the asset class going forward.
The Wildcard. The key factor to variability around real growth at 4% will be the ultimate path of Covid-19. This was prevalent during the ’21 recovery that witnessed a large hiccup when the Delta variant emerged. This is also what
I wonder if anyone at the start of the year would have predicted that US inflation would have risen to 6.8% y/y in November? If we had expected this, you would have thought that bond yields would have traded at
US CRE Market Insights: Commercial real estate (CRE) investment performance for US properties soared in the third quarter as unlevered total return reported by the National Council of Real Estate Investment Fiduciaries (NCREIF) registered 12.1% for the four quarters ending
Core government bond yields were lower and yield curves flatter last week (see chart of the week). More hawkish rhetoric from the recently reappointed Chair of the US Federal Reserve has upset the short end of markets, forcing yields higher.
Core government bond markets were a little calmer last week with yields a shade lower. This week should be relatively quiet as the US celebrates Thanksgiving on Thursday. We also expect the US President to announce if Jay Powell will
As U.S. inflation is hitting three-decade highs, market talk has been all about “liftoff:” When will the Federal Reserve and others start raising their policy rates? This is old news in emerging markets (EMs), where many countries have already raised
As the US Covid-19 shutdown took hold in March 2020, the US Federal Reserve (Fed) moved quickly and decisively to loosen interest rates and provide liquidity to counter the recessionary effects of the virus. On March 3, 2020, the Federal
Shortages have challenged the recovery throughout this year, in a number of ways. Difficulties in supply chains and a slow return to work have persisted, while the costs of energy and housing are on the rise. These conditions are not
European Gazette: As central banks move gingerly towards normalising monetary policy, a delicate balancing act is under way. They need to tighten policy – but neither too soon, nor too quickly. Indeed, the flattening of the US yield curve in
Market updates: At the start of the week, President Biden signed into law the $1.2 trillion infrastructure package. He is also set to announce a new US Federal Reserve Chief, which is expected to be either incumbent Jerome Powell or
Fast and affordable internet service has become a critical component to working, studying, accessing health care and participating in the political process – both in the US and across the globe. In 2016, the United Nations went so far as
Recent stresses in U.S. Treasury trading have been incongruous with a market that holds itself out as the deepest and most liquid in the world. For those trading in March 2020, it was surprising how the pandemic-induced panic threatened the
At its November meeting, the Federal Open Market Committee (FOMC) of the US Federal Reserve (Fed) left the target range for the federal funds rate at 0.00-0.25%. The Fed maintained its guidance on the policy rate, saying it expects to
Toen Joe Biden werd verkozen, werd er wereldwijd een zucht van verlichting geslaakt. Eindelijk waren ‘we’ verlost van een president die de wereld uit elkaar dreef. In de tijd dat Trump aan de macht was, stond een handelsoorlog regelmatig bovenaan
Bond markets, which have been under considerable pressure recently, saw a very sharp turnaround last week as the US Federal Reserve did no more than expected in the US, while the Bank of England kept rates unchanged, and the European
Market updates – 5 November 2021: Following September’s decline, US equities came back strongly in October following a better than expected Q3 results season. The month saw the S&P 500 up by 6.9% with a 3% gain in the last
US equities printed a new high as we end October while bonds remain mired in volatility with yields near their highs for the last 12 months – see chart of the week. Meanwhile, risk markets in fixed income are locked
In this paper, we evaluate the case for gold as a strategic allocation in an institutional portfolio. We start with a brief history of gold as an early form of money, its relationship to fiat currencies, and as an investment.
Against the spectre of soaring energy prices, labour shortages and supply chain constraints, a question that has arisen in the US has landed firmly on European shores: will inflation continue to rise and how persistent will it be? The prevailing
The robust reopening rally in US stocks lost steam in Q3, mired by broad September losses, as investors recalibrated expectations for the US recovery, inflation and Fed policy support. Amid big swings in risk appetite and a late-quarter bondmarket selloff,
U.S. Treasury yields rose last week and the yield curve flattened amid positive economic data and further signals from Federal Reserve Chair Jerome Powell of a taper announcement at the November meeting. The market now prices two full rate hikes
Diverging macroeconomic policies in China and the US have created market volatility recently amid concerns that China’s growth slowdown could spill over into Asia and a less generous US central bank could mean tighter US dollar liquidity for …
Investors who want to incorporate ESG considerations into a broad US market passive portfolio have traditionally had to accept a certain (often high) level of deviation from the risk and return characteristics of the underlying benchmark.
The long-term outlook for the US economy calls for peak cycle growth occurring in the summer of 2021 and then a continued moderation towards more trend-like levels over time. This positive growth runway is the flip side of the pandemic-driven
Financial market observers have drawn parallels between the recent credit events in China[1] and past crises such as the 2008 US subprime crisis triggered by the collapse of US investment bank Lehman Brothers and the 1998 collapse of hedge fund
Domestic energy supply shortages in Europe and dependence on volatile global markets are contributing to record gas prices across the continent. In the US, the latest inflation data is further testing the US Federal Reserve’s hypothesis that …
What should investors make of the flurry of regulatory tightening that China has implemented since the second half of 2020? How do the measures fit into China’s central strategy as it seeks to strengthen its domestic sector and embarks on
After a good start, September saw equity markets take a hit, particularly in emerging Asia. Alongside ongoing investor concerns about the pandemic and weakening global growth momentum, markets were rocked by news of debt payment problems at Chinese property developer
Weekly investment update: The recent spikes in energy prices and US Treasury bond yields have strained emerging Asia’s asset prices and currencies. Rising commodity prices are worsening Asia’s balance of payments dynamics, putting the currencies of large oil-importing countries under
The ‘excitement’ of an FOMC meeting, shenanigans at Evergrande, revised forecasts from the OECD and the German general election led to a rise in yields last week (see chart of the week). The US Federal Reserve presented a more hawkish
U.S. Treasury yields closed higher last week, led by longer maturities. After starting the week lower due to Chinese market fears, rates jumped sharply on Thursday to finish the week about eight basis points …
Equities have remained buoyant over the past weeks despite some challenges (China regulation, Afghanistan crisis), primarily due to the exceptional earnings seasons in the US and Europe. Looking ahead, we identify three main themes: the spread of the Delta Covid
The past month has seen geopolitics move back into the headlines as the United States and its allies made a final withdrawal from Afghanistan. Reflecting on the often messy resolution of military conflicts over the ages, the concept …
Judging from the performance of equity markets alone, the past four to six weeks appear to have followed the theme of the previous 12 months: a relentless rally in risk assets. When other markets are considered, though, a very different picture emerges.
It feels so good to celebrate the recovery from the Covid-19 recession. Economists in both the UK and US are turning out bright and buoyant forecasts for strong economic growth in both 2021 and 2022. Jobs are readily available and
Flash Update: Q2 2021 proved to be another good quarter for banks, beating market expectations once again. These beats were generally driven by better revenues in capital market divisions, especially equity trading and M&A, whilst loan loss provisions continued to
Equities have remained buoyant over the past weeks despite some challenges (China regulation, Afghanistan crisis), primarily due to the exceptional earnings seasons in the US and Europe. Looking ahead, we identify three main themes: the spread of the Delta Covid
brief summary of their views. In his speech, Chairman Powell indicated that the US Federal Reserve (Fed) is on track to begin tapering its $120 billion-per-month asset purchase program later this year and shared a dovish view on US inflation.
The markets easily withstood many adversities in the summer. In the coming twelve months equities and real estate remain our favorites, though their potential returns are only moderate. Asurprisingly good quarter is behind us. Despite the delta variant, the U.S.-China
Asset Allocation Monthly: During August, investor edginess increased. Financial markets partly reflected this with a decline in equities and commodities, a fall in long-term bond yields, and a rise in the US dollar. Expectations about the US Federal Reserve’s monetary
Recovery in the economy and real estate investment markets gathered pace in the second quarter, though the new Delta variant of the virus poses a threat. Real estate showed strong returns in the first half of the year, driven by
When it comes to America’s biggest technology companies, it seems like regulatory risk has never been higher. Most large technology platforms are facing pressure from US and European authorities, while lawmakers on Capitol Hill seem more inclined to doing something
– The recovery phase of the US economic cycle is increasingly mature and looks set transition to its next phase in the coming months, a ‘mini-cycle’, similar to the long expansions of the 1990s and in the post-Global Financial Crisis
Various Push-Pull Factors Argue for a Watchful Investment Approach: The U.S. and global high-yield markets experienced a strong second quarter. Year-over-year trends in corporate fundamentals based on first-quarter earnings released in the …
In Credit: Bond markets continue to lack much direction. It was inflation week in the US. As expected, the headline rate of consumer price inflation came in at 5.4%, unchanged from the prior month (see Chart of the week), while
Fixed Income Perspectives: U.S. consumer prices see their largest increase since 2008, topping all estimates. That summarizes headlines about recent inflation data. Since the beginning of this year, our view has been that the change …
In Credit: Inflation had long been expected to rise – and rise it has! Data released from the US and UK last week showed a jump in prices that exceeded (increased) expectations by some margin. Starting in the US, Consumer
Flash Update: Following the continued improving macroeconomic backdrop, the Fed are expected to signal a cessation of monetary stimulus in the coming months, initially with asset purchase tapering, followed by raising interest rates. In anticipation of such a move, investors
