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Hedge funds: looking ahead

After a news-heavy year so far, markets are gearing up for further volatility. Increased uncertainty and volatility offers opportunities for tactical traders, providing a differentiated source of returns. It has been a bumpy start to 2016. Amid sharp sell-offs on financial markets, it may seem that there is no place to hide. However, certain hedge […]

United States: not such a weak job report

Unemployment dropped, wage increases were higher than expected and the average workweek inched up. The overall situation remains healthy in the US labour market. Non-farm payroll employment rose by a soft 151,000 m-o-m in January, below consensus expectations (190,000). December’s figure was revised down (from 292,000 to 262,000), but November’s number was revised up (from […]

Euro area: good and bad reasons to worry about the euro area outlook

Although we have left our forecasts for euro area GDP unchanged – 1.8% growth expected in 2016, well above trend – downside risks have intensified in recent weeks. There are both good and bad reasons to worry about the recovery but, in short, the euro area can continue to do well despite sluggish global growth, […]

United States: the ISM Non-Manufacturing index fell further markedly in January

The ISM Manufacturing index stabilised at a low level in January. But its Non-Manufacturing counterpart fell further heavily, although it remained pitched at a still relatively healthy level. Nevertheless, together with most other economic data published recently, these surveys unfortunately confirm that growth entered 2016 with a soft momentum. ISM Manufacturing index stabilised at a […]

Conditions are ripe for rebound on equity markets

On 26 January, we explained that we expected the turmoil on global equity markets to abate in the near future. Several of the possible triggers for a rebound on equity markets that we identified are now materialising: Policy support from central banks. The Bank of Japan (BoJ) unexpectedly announced last week that it is cutting interest rates […]

US wages & monetary policy: not-so-dovish FOMC statement in January

Besides GDP data, today saw some other key data being published: the quarterly Employment Cost Index (ECI), admittedly the most reliable measure of wages and salaries. Following Wednesday’s less-dovish-than-hoped FOMC statement, prolonged uncertainty over inflation prospects and seemingly some modest pick-up in average hourly earnings increases – the other main statistic on wages – publication […]

United States: soft growth in Q4, but a serious downturn remains unlikely

US real GDP, curbed by lower stockbuilding and a slowdown in consumption growth, grew by a soft 0.7% in Q4. We have cut our forecast for 2016. However, we still expect reasonably healthy growth (2.0%). In Q4 2015, US real GDP grew by a weak 0.7% q-o-q annualised, just a fraction below consensus estimates (+0.8%). […]

Japan: Kuroda surprises by introducing a negative interest rate

Haruhiko Kuroda did it again. After having continuously denied the idea of using a negative interest rate, the governor of the Bank of Japan (BoJ) has now decided to introduce one. More specifically, the BoJ will adopt a three-tier system in which the outstanding balance of each financial institution’s current account at the Bank will be […]

Growth accelerated markedly in France and Spain in 2015

Spain and France are the first countries among the euro area’s largest economies to publish GDP figures. According to preliminary estimates, Spanish and French real GDP expanded by 0.8% and 0.2% q-o-q respectively in Q4, both in line with consensus expectations. Over the year, GDP rose by 3.2% and 1.1% respectively in Spain and in […]

We expect the Fed to remain on hold in March and that it will hike ‘only’ twice this year

After its meeting earlier this week, the Federal Open Market Committee (FOMC) published a statement where, as widely expected, it acknowledged that “economic growth slowed late last year”. It also added a comment that “the Committee is closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation, […]

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