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Market Outlook

Market Outlook
Aug 17

Mid-Week Bond Update

US-UK inflation: oceans apart

The post-Brexit risk rally continued for most Fixed Income asset classes over the past five trading days, but this time supported by a jump in oil prices, rather than central bank talk of further monetary easing. The technique was similar, though: officials from oil producing countries talked up the sector, highlighting the need to control the present supply glut. West Texas Intermediate surged to US$46.5 per barrel, up from $42.7 last week. Currencies of oil-exporting Emerging Markets (EMs) rallied, including the Colombian peso and the Norwegian krone.

Market Outlook
Aug 04

Mid-Week Bond Update

Out of Japan

Emerging Markets rallied over the past five trading days, supported by waning prospects of a US rate hike and a weakening US dollar. Expectations of higher US rates changed following a disappointing 1.2% second-quarter growth rate, which helped drag down the greenback against most developed market currencies. The US dollar, however, strengthened against commodity exporters such as Colombia, Russia and Mexico, as they suffered from the continuous slide of oil – the West Texas Intermediate (WTI) contract traded under US$40 per barrel for the first time since April. Japan experienced its worst bond sell-off in three years as investors fear the central bank can’t do more to reignite growth and inflation, following years and billions of yen in trying to do so. In Europe, banks suffered despite a generally positive regional Stress Test report on concerns that some institutions still need to raise capital. Europe’s inflation expectations fell.

Market Outlook
Aug 01

The big picture in bonds:

Market and Strategy Update

With further accommodation from central banks likely, Western Asset CIO Ken Leech believes spread sectors should continue to offer attractive returns, with Treasuries and sovereign bonds underpinned by low rates.

Market Outlook
Jul 29

An upturn in growth ahead?

Despite the economic pessimism now impacting valuations in global bonds, Brandywine Global's David Hoffman and Steve Smith perceive opportunity in developing markets in the 2nd half of 2016.

Market Outlook
Jul 27

Mid-Week Bond Update

No helicopter ride for Japan

Further monetary easing or prospects of such in Europe and Japan lifted traditional risk assets over the past five trading days, especially Asian and European High Yield bonds. Japan unveiled yesterday a 28 trillion yen (US$265bn) stimulus package to bolster its ailing economy. The measures, however, fell short of some investors’ expectations of a so-called “helicopter money” policy, or the direct handing of cash to businesses and consumers. Global sovereign bonds underperformed their corporate peers, led by the US, where improving economic data pushed up expectations of a rate hike, sending Treasury prices lower.

Market Outlook
Jul 18

Munis Shine in 2Q16

Municipal bonds outperformed their taxable counterparts in the second quarter and Western Asset still has a somewhat optimistic outlook for the sector going forward.

Market Outlook
Jul 01

Is the World Upside Down?

There's much in the global economy that defies expectations; for ClearBridge co-CIO Hersh Cohen, the answer is to stay focused on solid assets with the potential for stable or rising dividends, as well as diminished volatility.

Market Outlook
Jun 30

Fresh perspective on the UK/EU divorce:

Live from London

Highlights from our June 29 London roundtable -- offering fresh perspective on the unfolding realities surrounding Britain's vote to leave the European Union.

Market Outlook
Jun 27

Brexit's Aftermath:

Watch the Dollar

Brexit's main economic risk may be to the British economy, but beware the potential knock-on effect of a stronger US dollar, notes Francis Scotland of Brandywine Global.

Market Outlook
Jun 24

Implications of the UK's "Leave" vote

The UK has voted to leave the EU, a historic decision that will reshape and continue to send shocks through the market. Andrew Belshaw, Head of Investment Management, London, discusses the political and economic implications, as well as what this means for European bond markets and currencies, and the US and global markets.

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