Highlights So What? U.S.-China relations are still in free fall as we go to press. Why? The trade war will elicit Chinese stimulus but downside risks to markets are front-loaded. The oil risk premium will remain elevated as Iran…
Highlights In the political economy of oil, an awareness of the speed at which policy in systematically important states can change can restrain risk taking and investment. This can keep markets in an agitated state of anticipation,…
In our recent research, we have highlighted that our confidence in our constructive cyclical equity view has been shaken. There is budding evidence that the global growth recovery anticipated for the back half of the year could be pushed…
Highlights The risk premium in crude oil prices is rising again, as policy risk – and the potential for large policy-driven errors – increases (Chart of the Week).1 This is not being fully reflected in options markets, where…
Highlights We’ve searched in vain for imminent domestic weakness in the U.S. economy, … : Much of our work this spring has focused on trying to poke holes in our view that the equilibrium fed funds rate remains above the…
The Iranians, for their part, are unlikely to leap to the most aggressive forms of retaliation immediately – such as fomenting unrest in Iraq – because of their economic vulnerability. Small acts of sabotage or…
Given its gloomy economic outlook, Iran is looking to expand ties with its neighbors in an attempt to soften the blow from the sanctions. Earlier this year president Hassan Rouhani and Iraqi prime minister Adel Abdul Mahdi signed…
Highlights Oil & Bond Yields: Global growth indicators are starting to rebound, risk assets have returned to previous cyclical highs, and oil prices remain buoyant. This is a combination that will eventually result in rising global…
The upturn we anticipated in China’s industrial output in the wake of fiscal and monetary stimulus is becoming more visible. Accommodative central banks, along with a likely resolution of the Sino – U.S. trade war, will…