Apr 20, 2022 4:31 am
• The Taylor Rule implies that Fed funds rate could hit 7-10% • We fear that higher rates may do little to curtail demand growth and help ease inflation • The Fed can try to control excess demand but have little impact on supply disruptions • Markets remain at risk; bond yields to go higher,…
Read MoreApr 12, 2022 8:52 am
• The risk that persisting inflation presents is still a big deal for government bonds • Ongoing inflation risk undermines the safe-haven status of government bonds • Higher yields in riskier credit markets now more interesting to income seekers • There’s more logic to the equity market sell-off with defensives outperforming The markets just can’t…
Read MoreApr 6, 2022 10:47 am
The shock of the Russia-Ukraine conflict is wearing off from people’s minds and growth concerns are beginning to surface. Global GDP growth forecasts are expected to be revised downwards – Fitch recently cut its world GDP growth forecast for 2022 by 0.7pp to 3.5%, with the eurozone cut by 1.5pp to 3.0%. Even as the…
Read MoreApr 5, 2022 8:58 am
• The inversion of the yield curve has fuelled talks of an impending recession. • Depends on your definition of yield curve, 2y-10y inverted, but 3mth-10Y not so. • The minutes of the Fed’s last meeting likely to set out pace of quantitative tightening. • Food inflation-some worrying trends. • Political challenges in Sri Lanka…
Read MoreMar 29, 2022 11:09 am
• With inflation looming in the backdrop, the consensus among Fed governors for a faster rate hike is slowly gaining momentum • The Fed is clearly on a sticky wicket and the bond market has noticed its predicament, pushing up yields on two- and 10-year bonds to highs seen during periods of distress • Oil…
Read MoreMar 23, 2022 12:01 am
• Investor’s Buy-the-dip mentality at risk from the structural shifts in the world. • More inflation—key central banks keen to push on with monetary tightening. • Measures of financial market risk hit recent highs. • China surprises on relaxing the reform agenda, but fresh lockdowns cause some growth angst. It would be naïve to think…
Read MoreMar 17, 2022 12:23 am
• War in Ukraine continues to weigh on asset markets • Global growth now expected to falter, and inflation is a monumental issue • Unlike during COVID, governments and policymakers have far fewer levers to pull • The sell-off of high yield and emerging market debt has further to go • We share thoughts on…
Read MoreMar 15, 2022 12:23 am
Many around the world are probably heaving a sigh of relief, as a de-escalation between Russia-Ukraine seems to be in sight. Perhaps, it’s only wishful thinking for no one knows Putin’s intent or endgame. Nonetheless, global sympathy lies with Ukraine and a barrage of sanctions have been announced against Russia. However, sanctions hurt both parties,…
Read MoreMar 10, 2022 12:49 am
• Economists start to cut global growth forecasts but are still very much in the dark to downside risks • Oil continues to send jitters. While $150 looked a remote possibility even a few weeks earlier, rising spot prices make $200 a not-so-distant reality • As the uncertainty prevails, financial markets are struggling to find…
Read MoreMar 2, 2022 12:15 am
• With NATO’s response to the Ukraine crisis becoming firmer and aggressive, we could be in for a long-drawn-out conflict. • Last week’s market relief rally is proving to be temporary. • If the crisis lingers, oil flirting with $150 isn’t ruled out, further complicating the already-high inflation situation. • At this juncture, investors could…
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