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Emerging markets strategy Q1 2018: Volatility returns, fundamentals stay strong

By George Iwanicki
The combination of broadening economic growth and contained inflation is driving strong earnings gains.
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The Weekly Brief

While market volatility has increased in recent weeks, it is important for investors to stay focused on the fundamentals.
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Multi-Asset Solutions Weekly Strategy Report

The bond market sell-off has been broad-based – across regions and across the curve. Just as the strength in growth has been synchronized, so too has the rise in global bond yields.
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Weekly Bond Bulletin: A local surprise

By GFICC Investors
Emerging market (EM) local bond yields have defied historical relationships by resisting much of the recent risk-off move. Can this de-correlation with risk markets persist, or are EM local bonds due for a correction?
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Global Equity Views 1Q 2018

By Paul Quinsee
As volatility returns to equity markets, we see further gains in this cycle amid strong global growth and robust profits. From a regional perspective, we find the best prospects in emerging markets; on a sector basis we like financials and cyclicals.
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Weekly Bond Bulletin: Reversal or correction?

By GFICC Investors
The sharp equity sell-off that began the month has provided a reminder that markets do not move in one direction. But is this a full reversal, as we transition out of a world of easy policy, or simply a correction?
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Bank of England: Less willing to tolerate inflation above target

By karen Ward
The Bank of England (BoE) held its policy steady in February. The key interest rate was maintained at 0.5% and there were no changes to the asset purchase programme.
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February volatility: More noise than signal?

By karen Ward
Karen Ward looks at whether recent volatility is more market noise, rather than selling signal.
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Weekly Bond Bulletin: More than three?

By GFICC Investors
With the conditions for tighter monetary policy firmly in place, might the Federal Reserve (Fed) go faster or further than the market currently expects?
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Review of markets over January 2018

By Nandini Ramakrishnan
A summary of the factors driving global markets over last month.
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Emerging market debt strategy : Still going strong but beware headwinds

By Pierre-Yves Bareau
Emerging market (EM) fundamentals are on a very strong trajectory: the global synchronised recovery and easy monetary conditions are expected to continue, supporting further strengthening in EM economies and companies.
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Weekly Bond Bulletin: ECB to follow?

By GFICC Investors
With global growth strong and broad-based, several other major central banks have joined the Federal Reserve (Fed) on a tightening path. Is the European Central Bank (ECB) next?
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Italian general election: Some concern is warranted but risks to the eurozone remain low

By Maria Paola Toschi
This paper reviews the possible outcomes of the Italian election that will take place on 4 March 2018.
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Factor Views 1Q 2018

By Yazann Romahi
While risk assets again posted strong gains, performance was mixed across factors. Looking ahead we see potential for positive catalysts across equity, event-driven and macro factors.
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Weekly Bond Bulletin: Demystifying the dollar move?

By GFICC Investors
Despite positive rate differentials, the dollar’s meaningful decline has continued into the New Year. With no single culprit identifying itself, several factors may be contributing to the US currency’s ongoing weakness.
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Weekly Bond Bulletin: A stellar start

By GFICC Investors
2018 has got off to a strong start on both the economic and market fronts. Will this strength continue throughout the year, or are there clouds on the horizon?
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Weekly Bond Bulletin: Weighing the credit trade-offs

By GFICC Investors
The credit picture remains a trade-off between very strong fundamentals and tight valuations. With the technical backdrop becoming more mixed, where will the opportunities lie in 2018?
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Review of markets over fourth quarter 2017

By Michael Bell
A summary of the factors driving global markets over last quarter.
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The investment implications of tax reform

By Dr. David Kelly
The 2017 Tax Cuts and Jobs Act should soon be signed into law. While much of the motivation for U.S. tax reform has come from a desire to cut corporate taxes, most of the net benefits will accrue to individual taxpayers.
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Weekly Bond Bulletin: A bumpier ride next year?

By GFICC Investors
2017 has been a year of few surprises, with the macroeconomic picture relatively unchanged. Will this persist into next year, or could 2018 see the return of some volatility?
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The investment outlook for 2018: It ain’t over till the central banks sing

By karen Ward
The macro environment in 2017 provided fertile ground for most asset markets.
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Fed reactions following the December FOMC meeting

By Dr. David Kelly
In a widely anticipated move, the Federal Reserve announced it would raise the federal funds rate by 25bps to a range of 1.25% - 1.50%. The committee cited continued strength in the labor market and rising economic growth as the deciding factors in today’s announcement.
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Weekly Bond Bulletin: Underneath the sea of stability

By GFICC Investors
Fixed income investors have enjoyed plain sailing in 2017, buoyed by a healthy global economic picture. But with several idiosyncratic risks lurking beneath the surface, could it be time for investors to batten down the hatches?
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Brexit: EU & UK reach divorce terms

By karen Ward
Overnight the UK and EU authorities completed phase one of the Brexit negotiations.
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Weekly Bond Bulletin: Banking on banks

By GFICC Investors
A positive credit environment, combined with improving bank capital ratios, may provide opportunities in European subordinated bank debt, including additional tier 1 securities.
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Review of markets over November 2017

By Maria Paola Toschi
A summary of the factors driving global markets over last month.
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Weekly Bond Bulletin: Dollar bulls

By GFICC Investors
Against a robust economic backdrop, the US dollar has strengthened significantly since its September low. Can it go higher from here? And what could change its upward trajectory?
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Weekly Bond Bulletin: Welcoming volatility

By GFICC Investors
On the surface, several fixed income sectors appear to have seen a correction or perhaps a reversal of a trend. However, looking through the noise shows that the recent market weakness was primarily driven by idiosyncratic events.
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Weekly Bond Bulletin: Drilling down into oil currencies

By GFICC Investors
The recent rally in oil prices has not been accompanied in most cases by stronger oil currencies. In this week’s Bond Bulletin we delve into the main factors driving oil price and currency performance, and look at which currencies appear best positioned in the current environment.
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Monthly Market Review - November (Hong Kong traditional Chinese)

By Tai Hui
We are pleased to release this month's market review, a summary of the factors driving global markets over the last month.
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Weekly Bond Bulletin: Are we at the right dip yet?

By GFICC Investors
Emerging market local currency has been one of our preferred asset classes for some time. Does a recent dip in performance indicate a shift from the positive goldilocks scenario for emerging markets?
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The Bank of England increases rates

By Michael Bell
The first rate rise in a decade was widely expected by markets.
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Fed reaction following the FOMC meeting

By David Lebovitz
As expected, the FOMC voted to maintain the federal funds rate at a range of 1.00% to 1.25% at the November meeting, citing “realized and expected labor market conditions and inflation” as the driving forces behind today's decision.
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Review of markets over October 2017

By Nandini Ramakrishnan
A summary of the factors driving global markets over last month.
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Weekly Bond Bulletin: Risk-on rolls on

By GFICC Investors
The market optimism that followed Donald Trump’s election has returned with the passing of the Senate budget resolution. The strength of markets so far this year, coupled with the usual year-end derisking trend, may suggest that caution is warranted—but signs currently point to a persistence of positive momentum.
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Japanese election: A sweep in the polls does not mean sweeping change for investors

Reactions from the Global Market Insights Strategy team following Prime Minister Shinzo Abe and the Liberal Democratic Party's victory in Japan's snap election.
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3Q Earnings Update: Earnings will set you free

By David Lebovitz
David Lebovtiz and Tyler Voigt discuss the third quarter US earnings season.
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Quality over quantity: Investment implications of China’s new economic policy

This paper discusses the evolution of China’s economic policy after the 19th National Party Congress and how it impacts our view on Chinese equities.
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Weekly Bond Bulletin: European showdown: High yield vs. loans

By GFICC Investors
Diverging fundamentals in the European high yield and leveraged loan markets are strengthening the case for high yield, which continues to look attractive despite tight spreads.
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Weekly Bond Bulletin: Inflation Implications

By GFICC Investors
Strong global economic growth and tight labour markets are putting pressure on wages. Are we about to see a pick up in inflation, and if so, what will be the impact on central banks and fixed income markets?
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Monthly Market Review - October (Hong Kong traditional Chinese)

By Tai Hui
We are pleased to release this month's market review, a summary of the factors driving global markets over the last month.
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Monthly Market Review - October (Taiwan traditional Chinese)

By Tai Hui
We are pleased to release this month's market review, a summary of the factors driving global markets over the last month.
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Weekly Bond Bulletin - Looking beyond the hedges

By GFICC Investors
Rising US interest rates are contributing to a spike in US dollar hedging costs. This presents a challenge for euro and yen investors in particular, but also creates opportunities for active managers given the macro backdrop remains broadly supportive for fixed income assets.
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Review of markets over third quarter 2017

By Michael Bell
A summary of the factors driving global markets over last quarter.
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Weekly Bond Bulletin: Technically speaking

By GFICC Investors
With fundamentals strong and valuations looking more stretched, technicals remain a major driving force for global bond markets.
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Lonely at the top: Angela Merkel and the CDU/CSU win the federal election

Despite heavy losses in the popular vote, Chancellor Angela Merkel and the conservative CDU/CSU have – as expected – won the 2017 German federal election by a comfortable margin. They now have a clear mandate to form a new coalition government in the coming weeks.
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Weekly Bond Bulletin: Debating the yield curve

By GFICC Investors
The US Treasury curve has flattened over the course of this year, with the difference between two-year and 10-year yields currently at 0.84% (as of 19 September). As we embark on the process of central bank balance sheet normalisation, we look at whether the yield curve may continue to flatten, as would be expected when rates rise, or if we could begin to see a steepening effect.
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Weekly Bond Bulletin: EM corporates on the up

By GFICC Investors
As emerging market (EM) growth continues, a combination of favourable factors is working to the advantage of the high-yield corporates at the heart of the EM universe.
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Review of markets over August 2017

By Maria Paola Toschi
A summary of the factors driving global markets over last month.
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Weekly Bond Bulletin: Comparing apples with oranges

By GFICC Investors
US and European high yield bonds have performed well year-to-date, with total returns at 5.90% and 5.09%, respectively (as of 30 August 2017). Despite these strong returns, we believe high yield remains an enticing asset class for investors—though it’s critical to understand the nuances between the US and European markets.
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Weekly Bond Bulletin: Strategies for the dog days

By GFICC Investors
When caught in the doldrums, the only strategy is to wait, and stay alert for changing winds. With most bond indices idling in these dog days of summer, the US investment grade credit market may present a near-term opportunity.  
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Evolving expectations for infrastructure investing

By Serkan Bahceci
Infrastructure remains an attractive asset class for institutional investors given its low correlations to other asset classes, relatively high yields, and the positive outlook for investor demand.
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Weekly Bond Bulletin: China churns along

By GFICC Investors
With the outlook for the Chinese economy continuing to be a key driver of investor sentiment, we take a look at the latest Chinese data releases and examine the likely impact on global growth and on fixed income markets.
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Goldilocks and the three risks

By George Iwanicki
Emerging markets are in the early phase of their recovery cycle. When comparing cycle-adjusted P/E multiples, emerging market equity ranks as the cheapest segment of the global equity market.
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The Bank of England votes to keep rates on hold… for now

By Michael Bell
The Bank of England (BoE) voted 6—2 in favour of keeping interest rates on hold at 0.25%, but indicated that rates may have to rise faster than the two rate rises the market had been anticipating over the next three years.
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Review of markets over July 2017

By Nandini Ramakrishnan
A summary of the factors driving global markets over last month.
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Review of markets over the second quarter 2017

By Michael Bell
A summary of the factors driving global markets over the last quarter.
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China A-shares finally take their place on the world stage

By Ian Hui
As we expected, MSCI has now formally decided to include China A-shares in its benchmark indices following its latest Market Classification Review, marking an important milestone for China’s international markets.
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An absolute majority for Macronomics

By Vincent Juvyns
As widely anticipated, Emmanuel Macron’s La Republique en Marche party has won an absolute majority in the French National Assembly after the second round of legislative elections on Sunday 18 June.
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Reactions following the June FOMC meeting

By Dr. David Kelly
In this bulletin, Dr. Kelly reacts to the FOMC's decision, at their latest meeting, to raise the target range for the federal funds rate.
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Review of markets over May 2017

By Nandini Ramakrishnan
A summary of the factors driving global markets over last month.
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Moody's cuts its China rating

By Tai Hui
On 24 May, Moody’s downgraded China’s sovereign rating to A1 from Aa3 and changed its outlook from negative to stable. This places China’s sovereign rating by Moody’s on par with Japan, Saudi Arabia, Israel and Czech Republic.
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What if May falls in June?

By Michael Bell
The market is currently assuming that the Conservatives will win a large majority and eventually deliver a relatively hard Brexit, but that the election will make it easier for them to agree to a transitional arrangement, prolonging single market access for two or three more years after March 2019.
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Political uncertainty and market turmoil in Brazil

By Gabriela Santos
After a report was published late Wednesday night implicating interim President Temer in a bribery scandal related to Operation Car Wash, opposition politicians called for his impeachment or resignation, resulting in Brazilian markets opening starkly down on Wednesday.
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Political risk in Europe has fallen

By Michael Bell, Vincent Juvyns, Tilmann Galler
2017 was billed as a year of potential political turmoil for the eurozone. Investors feared that elections in the Netherlands, France and Germany could lead to a victory for an anti-euro party plunging the very future of the eurozone into doubt
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Rethinking income investing amid rising rates

By Michael Schoenhaut, Talib Sheikh, Leon Goldfeld
This paper, written by Michael  Schoenhaut, Talib Sheikh, Leon Goldfeld and Yuejue Jin, analyzes how an active and flexible approach to income investing, which balances risk with return, can serve investors well amid rising interest rates.
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Macron conquers, but France remains deeply divided

By Vincent Juvyns, Stephanie Flanders
Vincent Juvyns, Global Market Strategist, gives us the latest update on the French Presidential Elections and impact this has on investors.
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Review of markets over April 2017

A summary of the factors driving global markets over last month.
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The two-horse race that the polls predicted

By Vincent Juvyns, Stephanie Flanders
The 2017 French presidential election has been the most uncertain in the history of the Fifth Republic. But on this occasion, the opinion polls turned out to be right, with centrist Emmanuel Macron and Front National leader, Marine le Pen, both proceeding to the second round.
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May calls for June election

Theresa May announced her intention to call an early general election for Thursday 8 June. She made it clear that this election would be about her approach to Brexit, saying current divisions within Westminster jeopardise the UK’s negotiating position with the EU, which she wants to strengthen.
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Emerging Market Debt: Reflation takes root

By Pierre-Yves Bareau
Given the risks posed by protectionism, we are more cautious on open economies and those more dependent on external funding. Overall, we have shifted our focus from market beta to carry this quarter, coming off of solid first quarter performance, tighter valuations and the little market premium attached to the risks we have identified. We place an emphasis on short-end names and those idiosyncratic stories that we identify as having positive event skew.
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Inflation's next phase

By Benjamin Mandel, Michael Hood
For investors, the recovery of inflation and inflation risk premia, against the backdrop of anchored inflation expectations, imply a supportive environment for risk assets. Our outlook suggests continued upward pressure on the market pricing of inflation, manifesting in higher bond yields and a widening spread between nominal and inflation-protected bonds.
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European politics update: Stopping populism in its tracks?

By Vincent Juvyns
The Centre-right victory in the Netherlands and the rise of Emmanuel Macron in the polls for the French presidential elections both give some reassurance to investors that populist forces are not about to reignite the eurozone crisis, nor derail the recovery under way in European markets.
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Review of markets over February 2017

By Nandini Ramakrishnan
A summary of the factors driving global markets over the last month
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UK GDP: Continued strong growth numbers 

By Alex Dryden
With the economy growing at 2% and inflation hitting a 30-month high in December, the Bank of England is in a tough spot. In normal times, strong economic growth and higher inflation would lead to tighter monetary policy.
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Entering the reflation era

By Pierre-Yves Bareau
We are entering a new investment paradigm: the era of "lower for longer" and "search for yield" has now been replaced by an era shaped by higher growth, inflation and rates.
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