Insights

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Navigating Shifting Global Markets in 2024, Risks and Opportunities: January 2024 Market Commentary

We anticipate the current post-Covid economic cycle to end this year in a so-called “soft economic landing”. While volatility may be seen in stocks and currencies, we believe the equity market will eventually reflect the onset of a new bullish economic cycle commencing from 2025, particularly in response to central banks’ rate cuts in 2024.

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Stocks, Bonds & Gold climb as global inflation declines: December 2023 Market Commentary

Equities, bonds, and gold rose sharply in November, while major currencies appreciated against the US dollar. As inflation is moderating in the US (down to 3.2%) and Europe (down to 2.4%), the US Federal Reserve and the European Central Bank (ECB) no longer need to maintain high interest rates to slow the economy and thus tame inflation. The two central banks are expected to start cutting their key interest rate (currently 5.33% for the effective Fed funds rate and 4.50% for the ECB euro deposit rate) around mid-2024

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Inflection point: The cost of US debt reached an unsustainable US$1 trillion per year: November 2023 Market Commentary

The global equity and bond markets sold off in October, due to the disruption caused by the Israel-Palestinian war, the heterogeneous earning season and the globally higher interest rate environment that is likely to last till late 2024.

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USD and EUR 10-year bond yields on the rise: October 2023 Market Commentary

In September, although the US central bank decided not to hike its Fed funds rate, its communication strongly highlighted the persistence of inflation and the potential need for further rate hikes to fight it. As a result, 10-year government bond yields in the US and Europe continued their ascension, reaching 15-year highs, i.e. 4.7% in USD and close to 3% in EUR.

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Growth disappoints, gold well supported by ongoing central bank purchases: September 2023 Market Commentary

In August, stocks and investor sentiment fell as growth data disappointed across the world, including in China.

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Persistent economic growth despite higher interest rates: August 2023 Market Commentary

Higher interest rates in Western economies amid a sustainable global economic outlook is a favorable environment to invest in bonds. This is an opportunity not seen in the past 20 years, where investors can have visibility on regular income from bonds, such as bank bonds (e.g. 6% per annum in USD), and capital preservation regardless of market volatility.

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