Beyond Bulls & Bears

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Fixed Income

Brexit: “I Have Confidence in Confidence Alone”

I do think we’re at a most extraordinary valuation metric across many bond markets that again goes further than just any possible impact on the United Kingdom. For Europe, this situation amplifies the negative growth shock.

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Perspectives

Global Economic Perspective: June

Our view is that the US economy remains on course to pick up over the rest of this year, despite May’s disappointing payroll report and the Fed’s subsequent decision at its June meeting to leave interest rates unchanged. We do not place too much importance on this single piece of data and believe the economy’s robust fundamentals are likely to fulfill the Fed’s criteria for tightening monetary policy fairly soon.

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Perspectives

Global Economic Perspective: May

The road toward the ECB’s target of 2% inflation will likely be long, but we maintain our belief that the central bank is currently pursuing all of the politically feasible policies at its disposal that can encourage a further revival of economic activity and help achieve that goal.

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Fixed Income

There Is a Way Forward for Brazil

We see clear consensus among observers that reforms have to be done in Brazil, but there is only mild optimism about the political will to adopt even a very conservative reform effort ... It won’t be easy, but there is a way forward for Brazil.

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Fixed Income

Why Investors Yield to Australia’s Bond Market

We believe the RBA doesn’t feel the need to act on its easing bias because the Australian economy remains reasonably healthy, albeit at a pace of growth that is at the lower end of what policymakers would like to see.

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Global Economic Perspective: April

We have some apprehension about the more dovish stance taken by the US Federal Reserve, which in our view may place too great a focus on global factors, despite a relatively tight US labor market and some indications of a pickup in core inflation.

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Fixed Income

A More Accommodative Fed

While market consensus currently seems unconcerned about inflation, we know this could change quickly. Longer term, we certainly think higher-than-anticipated US inflation is a potential risk.

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Global Economic Perspective: March

We regard the greater stability in commodity prices, along with a lessening of volatility in financial markets, as welcome, and believe it should provide a more stable platform for the global economy, where growth remains acceptable, if lower than desirable.

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Fixed Income

Why Europe Is Wrong to Ignore the Threat of Brexit

Many European investors seem to think this so-called 'Brexit' decision is an issue that will only affect the United Kingdom. We think they’re mistaken and that Brexit has significant implications for investment markets in Europe as a whole.

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Putting Europe’s Growing Bond Market into Perspective

We share the widespread expectation the volatility that we’ve seen in recent months will continue for some time to come and that is why we expect the ECB to provide more easing, probably by extending its QE programme yet further.

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This Is Not 2008

The risk aversion across emerging markets appears to have reached a maximum state of unwarranted pessimism, in our view, and we see a vast set of valuation opportunities amid the volatility.

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Global Economic Perspective: February

The impact of China’s rebalancing is likely to remain a headwind, particularly for countries that have relied on its appetite for raw materials. But this is likely to be counterbalanced by the continuation of the various accommodative monetary policies that are in place around the world.