Developed Countries
The preliminary January University of Michigan Consumer Sentiment Index missed estimates on Friday, driven by a cooling of consumer expectations. Worryingly, both the 1-year and 5-to-10 year inflation expectations ticked up to 3.3% from 2.8% and 3.0%,…
Our European Investment strategists looked at the developed markets bond selloff from a European perspective, focusing on Euro area and UK government bonds and currencies. The recent selloff in European bonds is driven primarily by surging US yields,…
Despite a strong dollar, rising yields, and falling equities, oil and copper prices have recently risen. Oil has broken out above its 200-day moving average, while copper is currently testing its own. Oil’s bullish price action is explained by…
UK and German bonds are victims of the global bond market riots. Will European yields continue to move higher and will the euro and the pound find a floor anytime soon?
Thoughts on the increase in bond yields and this morning’s employment data.
Our Chart Of The Week comes from Arthur Budaghyan, Chief Strategist for our Emerging Markets Strategy service. Arthur discusses the relationship between corporate bond yields and stock prices. Historically, US stocks suffer when US corporate bond yields…
The US December jobs report came in stronger than expected. Payrolls rose by 256k vs. a downwardly revised 212k in November, leaving the 3-month moving average at about 170k. The unemployment and underemployment rates decreased to 4.1% (from 4.2%) and 7.5%…
The global economy is subject to numerous cycles displaying reflexivity and feedback loops. One of these is the relationship between financial conditions and growth. Given this relationship, economic strength can plant the seeds of its own demise.Markets are…
Every year we highlight five low-odds scenarios that would have a major impact on global financial markets if they happened. This year we contemplate a total reversal of Chinese policy, a US-Iran nuclear deal, a breakdown of NATO, US military action across the Americas, and an internationally coordinated FX intervention.
Our Counterpoint Strategy team sees Japanese real yields as the key risk to global equities. Rising inflation expectations in developed markets, excluding Japan, will keep inflation above target and limit further rate cuts. However, in Japan, inflation…