Flight to quality

China’s onshore credit market – Understand the investment implications and impacts from COVID-19

In times like this, it’s important to understand how the market can impact your cash portfolio. As the Chinese government and global central banks continue to unveil unconventional policies, the outlook for Chinese corporate issuers remain uncertain. Watch Andy Chang, Credit Analyst, and Kheng Leong Cheah, Asia Pacific Head of Global Liquidity Sales as they examine the China’s onshore credit market – from investment implications, impacts of major market events, to an industry view, and investment implications.

OUR EXPERTS CAN GUIDE YOU THROUGH PERIODS OF EXTREME TURBULENCE

LIQUIDITY INSIGHTS EYE ON THE MARKET MARKET UPDATES

LIQUIDITY INSIGHTS

RBA Tentative Tapering

The RBA announced its first tentative step towards tapering and eventual policy normalization.

PBOC latest deposit price reform – limited implications for cash investors

In June 2021, the People’s Bank of China (PBoC) announced changes to commercial banks’ mechanism for setting the time deposit ceiling from a multiplier method to a basis points method.

PBoC RRR Cut - A dovish policy signal

On 9 July 2021, the PBoC announced a 50bps RRR cut that will reduce bank funding costs and unleash a substantial quantity of liquidity support. The size of the rate cut surprised the market and confirmed the authority’s dovish pivot.

Monetary Authority of Singapore – Cautious optimism as recovery continues

At their latest semi-annual policy meeting, the MAS' comments was modestly upbeat and the central bank revised up their headline inflation target - both of which could have implications for SGD cash investments.

Hong Kong Budget 2011/22 - Is the glass half full or half empty

Hong Kong's 2021-22 budget was announced recently. Although there were a few specific implications for short-term interest rates, the budget and the government’s economic plans will have significant longer term implications for HKD cash investors.

RBA Divergent Difficulties

Cash investing remains extremely challenging with institutional investors trapped between an extremely dovish Reserve Bank of Australia (RBA) and markets pricing in inflation and steepening yield curves.

Chinese taper tantrum

The surprise withdrawal of liquidity by the People’s Bank of China in the last week of January triggered a spike in short-term interest rates. Aidan Shevlin, International Head of Liquidity Fund Management, shared his perspectives on China’s monetary policy.

China’s onshore corporate bond market – understanding recent market volatility

China’s bond market has seen an unusual wave of defaults over the past month – triggering a jump in credit spreads and raising investor concerns. Find out the implications to cash investments and why independent credit research remains important.

RBA's further rate cuts - when low is not low enough

The RBA cut base rates and announced the introduction a traditional quantitative easing program “to support job creation and the recovery of the Australian economy from the pandemic”. This was by far the most wide-ranging monetary policy actions by the RBA – with significant implications for the AUD interest rates and investors.

HIBOR – History does not necessarily repeat itself

Escalating political and trade tensions, strong international demand for HKD and increasing connection with China, have weakened the Linked Exchange Rate System (LERS) – with significant implications for HKD cash investors.

Reserve Bank of Australia: Able but not willing

The recent Melbourne lockdown and uneven global recovery have increased market speculation that the RBA will intervene further to support the recovery – with significant implications for the AUD and short-term interest rates.

Interbank Offered Rate (IBOR) Transition: The impact on Asia-Pacific Markets

Majority of Asia-Pacific markets administer and maintain their own IBORs, and are responding to IBOR transition differently.

Market & Portfolio Commentary

Read the latest review of Global Liquidity market and portfolio commentary across the Americas, Asia Pacific, as well as Europe and UK.

Singapore Dollar – no longer defying gravity: Implications for cash investors

The Covid-19 outbreak has accentuated the negative implications for international trade, as well as domestic productivity and tourism in Singapore.

Implications of COVID-19 outbreak for short term interest rates

The recent coronavirus (2019-nCoV) outbreak in China has increased investors’ trepidation and financial market uncertainty.

EYE ON THE MARKET

Red Med Redemption

Red Med Redemption: A visual depiction of politics, ideology, vaccine resistance and the Delta variant. Other topics: US economic recovery update, and big tech reliance on acquisitions to fuel growth at a time of rising anti-trust enforcement. We conclude with a new “Investor Odds & Ends” section that covers NYC hotel/office markets and possible changes in personal, corporate and international tax rates.

Thy Brother’s Keeper

COVID and the Delta variant; the Fed as firefighter and arsonist; US-China economic divorce picks up steam; and the pig-snake inflation timetable (how long until we know if there’s a permanent wage/price rise).

Food Fight: 2021 private equity update

Every two years, we take a close look at the performance of the private equity industry given its rising share of institutional and individual portfolios. Our findings this year: the private equity industry is still outperforming public equity, but this outperformance narrowed as all markets benefit from non-stop monetary and fiscal stimulus, and as private equity acquisition multiples rise. We examine manager dispersion, benchmarks, co-investing, GP-led secondary funds, the torrid pace of industry fundraising and manager fees in this year’s piece.

An investor’s look at China’s recovery

An investor’s look at China’s recovery, the Sinopharm vaccine and the importance of scientific methods

Inflation. Duh!

Our February and March Eye on the Market pieces discussed shrinking US excess capacity, fiscal stimulus and the contortions people gyrate into to convince themselves that rising inflation would not be a problem for equity markets. My conclusion at the time: expectations for permanently low inflation and rates drove the rise in P/E multiples in recent years, so a reversal in inflation and rate expectations poses a risk to them. Since March, US equity markets hit a plateau as inflation expectations reached their highest levels in a decade. This Eye on the Market addresses questions we’re receiving on markets, inflation, rates and capital gains taxes, and concludes with comments on COVID and India.

Eye on the Market 11th Annual Energy Paper

Even as the world becomes more energy efficient each year, overall levels of CO2 emissions continue to rise. Without decarbonization shock treatment, humans will be wedded to fossil fuels for longer than they would like.

Absolute Value

Topics: Biden goes for broke on growth, driving coincident and leading indicators to all-time highs; the Value recovery and where it goes from here; COVID herd immunity, the path to normalcy and rising concerns about thrombosis risks from vector vaccines.

The Smalligarchy

The Smalligarchy: how the narrowest political margins in decades could deliver one of the biggest taxation and spending increases in the post-war era; a discussion of the investment implications of physical and human infrastructure bills; the US economy approaches lift off; and the latest news on Morone saxatilis.

Interest rate pretzels and the Zoom shock on real estate

If long-term US interest rates stay below 2%, that’s a great sign for equity investors. But if they don’t…it’s amazing to see the pretzels that people contort into to convince themselves that rising rates are not a problem for equities. Also: an early look at the Zoom shock on commercial and residential real estate, and the diverging COVID trends in the US vs Europe.

Very short stories

Short stories on the global recovery, plummeting COVID infections, Larry Summers & the bond market, SPAC sponsors, renewable energy, the Texas power outage and the battle for the Republican Party.

Hydraulic Spacking

The SPAC capital raising boom, and why Biden’s early stage energy policies are more likely to increase oil imports rather than reduce emissions.

Fear of Flying

Equity markets are flying. So is COVID. So are corporate reactions to Congressional objectors.

Eye on the Market Outlook 2021: The Hazmat Recovery

Michael Cembalest’s views on what will drive markets and the economy in 2021, as well as the challenges we face that stimulus and vaccines can’t solve.

Special EOTM: Jan 6 Joint Session of Congress

The Jan 6 Joint Session of Congress is shaping up to be a very contentious meeting. Here’s a brief 2-page primer on the rules of engagement, for those interested.

Holiday Eye on the Market: The Winter of Our Discontent

The belief in election illegitimacy is spreading faster than COVID. With field reporting from Alexander Fleming, Rutherford B Hayes, Richard III, Bob Newhart and the Attorney General of Ohio.

Thanksgiving Eye on the Market: The Armageddonists, Revisited

The Armageddonists were not rescued from underperformance purgatory by COVID, and markets are at all-time highs again with prospects for further gains in 2021. However, I can think of something that could rescue them, at least temporarily: the risk of electoral illegitimacy and Constitutional mayhem on January 6th. See pages 4-6 for a review of all the rules and procedures in play, including an update from Wayne County MI, and a hyperlink you may need this Thanksgiving.

Quiet Flows the Don

For the first time in 100 years, a challenger unseated an incumbent President at a time of strong economic and market tailwinds. However, the election delivered a clearer referendum on the President himself than on policy issues dividing Democrats and Republicans; it looks like divided government may remain. So, in this week’s Eye on the Market, a (possibly) divided government investor playbook. To conclude, comments on this morning’s Pfizer vaccine news and the road to herd immunity (approval, distribution and acceptance).

Special Edition: Pennsylvania, absentee ballots, GOP challenges and multiple slates of electors

During the President’s speech on Thursday, he made it clear that the next step in the process will be a wave of GOP litigation in an effort to invalidate votes, with a special focus on the treatment and counting of absentee ballots. In this brief note, we review the election rules, legal issues, court precedents and election permutations which all lead to one place: Pennsylvania, whose state legislature holds the key to whether the Congress will have to sort out multiple slates of electors in early January.

Court Marshall

As the election outcome increasingly looks like a split decision (President Biden with a GOP Senate), we’re preparing for intense legal battles in the courts, and also analyzing the market-related policies under control of the Executive Branch that Presidents can implement on their own without legislative approval: energy policy, some healthcare changes, China trade policy, immigration, Iran, antitrust policies and net neutrality.

US vs Google, Europe vs COVID

We’ve all been focused on the election recently, but there are other topics worth covering since they will affect markets regardless of the election’s outcome: The United States vs Google, Europe vs COVID, and China vs US COVID aftermath.

Buckle Up

The problem with states that do not allow pre-election processing of absentee ballots; a COVID Rorschach test; Trump and Biden deficit explosions, equity market impacts and trends that are being priced in as Democratic Sweep odds rise; Vaccine timing & virus-sensitive businesses.

Election 2020 - Praying for Time

The election as referendum on America: how well does the “system” work, and for whom?

The Needle and the Damage Done

The cost of engineering a US recovery as the world waits for a vaccine; Biden agenda on taxes/spending; Tech stocks (2020 vs 1999); COVID and The Fountainhead; US election rules, dates and process in light of derogatory comments on mail-in voting by the President and Attorney General

COVID Charts of the week

Michael Cembalest, Chairman of Market and Investment Strategy, shares weekly insight and analyses on data covering the impacts COVID-19.

The Bounce

The US recovery; The flood of money and market returns; Globalization lives; Reducing COVID mortality through vascular treatments; Realistic timetables for never-been-done before vaccines; Sweden’s COVID experiment is not what you think

The Day After

Tracking the rebirth of the US consumer with real time data as a function of infection levels and state policy. Additional topics: no evidence yet of material second waves of COVID infection, and a round-up of the latest news on vaccine trials (Moderna, Oxford, Sinovac) and anticoagulants.

Zoom Room

In this week’s Eye on the Market, we review topics from our recent client Zoom calls. Topics include: risk of inflation, second waves of infection, the effectiveness of lockdowns and Biden’s taxation and spending agenda.

Ready or Not: The US prepares to reopen

An update on the COVID-19 crisis as the US prepares to reopen despite having one of the highest infection rates in the world. Additional topics: monoclonal antibodies and anti-viral trials; the growing gap between markets and the economy; S&P 500 earnings haves and have-nots; regional equity performance (Europe loses again) and leveraged loans at a time of rising bankruptcies.

State's Rights

In this week’s note, we discuss the latest news on US infection trends and reopening plans, Remdesivir trial results and whether US fiscal stimulus is “enough”.

Are we there yet?

Lockdown relaxation and economic reawakening…are we there yet?

COVID and culture

In this week's note, we take a close look at country and regional virus data, and examine the pitfalls of over-extrapolating trends that often reverse.

The equity rally and herd immunity

After the equity rally, P/E multiples are back at around 16x 2021 consensus earnings.

Man vs Nature Part II

Virus trends and head-fakes, convalescent plasma and U.S. vs. China lockdowns.

Man vs Nature: what the government can and cannot fix

There are things the government can try and fix during a pandemic and other things which it can't.

John Stuart Mill and the road from ruin to recovery

There are some difficult days ahead as quarantines and lockdowns grow. I want to share something with you from John Stuart Mill as we head into the unknown.

Coronavirus (COVID-19) research compilation

Michael Cembalest, Chairman of Market and Investment Strategy, has compiled his extensive research on coronavirus.

The pandemic gap

A lot of data is being made available on the coronavirus, but most of it requires careful analysis before drawing conclusions.

Berning Man

Confounding almost every forecast we saw last week, Senator Biden appears to have emerged from Super Tuesday with a sizeable delegate lead. Why might the night have turned out so differently from what was expected just a few days ago?

COVID-19 update

A Coronavirus update: severity, consequences and implications for investors.

Millions and Trillions

Answers to questions on the coronavirus, US megacap stocks, the cost of Democratic Healthcare plans, the Iowa caucus and the problem with the student loan system.

Rotten Tomatoes

Consensus reactions to the Phase I US-China deal are very skeptical, but may be missing the broader point. A brief note on what happened, and the alternatives.

Ghosts of Christmas Past

After a very positive year for investors in 2019, we expect lower positive returns on financial assets in 2020 as some Ghosts of Christmas Past reappear.

War of the Worlds

How a discussion about China and Hong Kong morphed into a chart war about Trump, Hoover, Taft, Rachel Maddow and Anderson Cooper.

The Armageddonists

While recessions and bear markets are a fact of life, something peculiar happened after the Global Financial Crisis: the rise of the Armageddonists.

Warren Peace

A close look at the Progressive Agenda, China’s deteriorating welcome mat in DC and US Tech IPOs.

Active Management and QE-distorted markets

Michael Cembalest analyzes the performance of over 6,700 domestic and international active equity managers and discusses the challenges they face.

Cold Turkey

A brief comment on a proposal from leading Presidential candidates to ban hydraulic fracturing everywhere, immediately.

So long Yellow Brick Road

It was a long, hot summer at the Heritage Foundation. An update from the front lines of the Trade War.

Lost in Space: The Search for Democratic Socialism in the Real World

Michael went on a search for Democratic Socialism in the real world, and ended up halfway around the globe from where he began.

Listen when people tell you who they are

Michael discusses how he should have taken Trump at his word on tariffs, and the impact of the widening trade war on global growth and equity markets as proposed tariffs approach pre-war levels.

Smoot Hardly

The US-China trade war, prescription drug price legislation and the 2020 election.

Energy Outlook 2019: Mountains and Molehills

Topics: unattainable objectives of the Green New Deal; overview of the world’s decarbonization challenges; Germany’s energy transition; Trump’s War on Science.

MARKET UPDATES

Progress towards (substantial) progress

The Federal Open Market Committee statement highlighted the continued improvement in economic conditions due to progress on vaccinations, but noted risks to the outlook still remain, largely reflecting the rise in cases over the past few weeks in unvaccinated communities.

How should investors view the recent Chinese equity sell-off?

This paper, written by Chaoping Zhu, discusses the Chinese new reforms and the subsequent selling pressure in Chinese equities, and what this means for investors.

More inflation pressure from energy prices?

This paper, written by Tai Hui, discusses how the outlook for energy prices will shape the inflation outlook going forward, and what this means for investors.

Normalizing growth and fine-tuning policy

This paper, written by Chaoping Zhu, breaks down China's 2Q 2021 GDP data, and what this means for investors and Chinese policies going forward.

Why are bond yields so low?

This paper, written by Kerry Craig, discusses the confluence of both fundamental and technical factors that has led to a decline in government bond yields despite a still-robust outlook for growth, and what this means for investors.

Is a more hawkish Federal Reserve bullish for the USD?

This paper, written by Tai Hui, discusses what the future path of the USD could look like given a more hawkish stance from the Federal Reserve, and what this means for investors.

What are the latest inflation data telling us?

This paper, written by Tai Hui, discusses what investors should make of the strong recent inflation data, and what it means for their investments.

A hawkish surprise

This paper, written by Dr. David Kelly, addresses the FOMC's June meeting announcement.

What happens past the peak in growth?

This paper, written by Kerry Craig, discusses what investors should expect after the recent slew of robust economic data, and what it means for investors.

The implications of carbon pricing initiatives for investors

Could carbon prices be about to rise? Global market strategist Vincent Juvyns looks at the increasing regulatory pressures on carbon pricing, and assesses the potential impact on markets

Are commodities still a good inflation hedge amid decarbonization?

This paper, written by Kerry Craig, Ian Hui and Gareth Lam, looks into whether commodities can still protect investors from inflation given the global transition to a low-carbon economy.

What’s driving the Chinese yuan stronger and what’s next?

This paper, written by Chaoping Zhu and Marcella Chow, discusses the driving forces behind the recent Chinese yuan rally and what this means for investors.

What does the latest wave of outbreak in Asia mean for Asian equities?

This paper, written by Tai Hui, addresses the latest wave of COVID-19 outbreak in Asia and vaccination progress with its investment implications to Asian equities.

1Q21 U.S. earnings season

This paper, written by Ian Hui, highlights the outlook of 2021 U.S. earnings and its investment implications.

What role should European equities play in asset allocation?

This paper, written by Tai Hui, discusses why Asian investors may want to look to European equities to provide return-generating potential and diversification benefits to their core equities allocation.

Achieving net zero: The challenge ahead

In this second paper out of four, we discuss the scale of the challenge ahead in the path towards a carbon-neutral world.

Achieving net zero: The path to a carbon-neutral world

In this first paper out of four, we explore the paths that economies across the world are taking in the effort to achieve net-zero emissions, and introduce this series of four papers which will provide a framework to understand and address the challenges of getting to net zero and the associated investment implications.

What will higher U.S. taxes mean for the market?

This paper, written by Kerry Craig, addresses the recent announcement of U.S. tax increase proposal and its investment implications.

Quickly improving economy, with a slow moving Fed

Recent economic and employment indicators have improved markedly in recent weeks. The Federal Open Market Committee (FOMC) appropriately acknowledged this recent strength, while continuing to reassure investors it would not act prematurely in pulling back monetary support.

How to protect against the inflation risk?

This paper, written by Kerry Craig, discusses how investing in core real assets can help investors hedge the risk of inflation while still creating income.

What does 1Q 2021 Chinese GDP mean for policy and investment?

This paper, written by Tai Hui and Chaoping Zhu, breaks down the 1Q 2021 Chinese GDP figures and discusses how this would impact China's fiscal and monetary policies, and subsequently, Chinese investments.

Happy Earth Day!

Over the last 12 months, the global pandemic has shaken our lives in many ways. While good health and social interactions are probably top of mind for most of us, the environment and climate are also among our key concerns.

What is the inflation risk?

This paper, written by Kerry Craig, discusses the inflation outlook in the U.S. and around the world in the coming months and years, and what this means for investors.

Asia's decade: Getting ahead of the growth opportunity

Rapidly rising incomes in vast populations are set to make Asia the largest contributor to global growth in the 2020s. For investors, the opportunity looks too big to ignore.

Can international stocks provide a hedge against rising inflation?

Inflation has been a hot topic amongst investors. Globally, inflation is expected to rise this year from 2020’s low levels. This reflation, a sign that the economy is operating above potential, should lead to strong earnings growth as well

How will the Fed’s decision on the Supplementary Leverage Ratio (SLR) impact markets?

For better or for worse, banks are required to meet various liquidity and leverage requirements. One ratio that measures a bank’s ability to absorb losses is the Supplementary Leverage Ratio (SLR). The SLR formula measures tier 1 capital, which consists mostly of common and preferred stock, as a percent of total leverage exposure.

Chinese equities market correction—why and what is next?

This paper, written by Marcella Chow, discusses the drivers behind the recent Chinese equities market correction, and how investors should prepare for what comes next.

Same Dovish Tune with More Hawkish Melodies

The rollout of COVID-19 vaccines and the passing of a further USD 1.8trillion fiscal package has brightened the economic outlook and today’s meeting gave investors a gauge on how this might adjust monetary policy in the years ahead.

Are emerging markets vulnerable to the recent rise in U.S. Treasury yields?

This paper, written by Tai Hui, discusses the impacts of rising U.S. Treasury yields and stronger U.S. dollar on different emerging markets asset classes.

Fiscal Surge and Easy Money

The pandemic would always have demanded a dramatic response in terms of easy monetary and fiscal policy. However, policy responses have been shaped not just by the needs of the present but by the lessons of the past.

The case for ESG integration when investing in EM

Explore the strategies that can help investors maintain income and diversification in a post-Covid world of low interest rates and negative government bond yields.

Are commodities entering a supercycle?

This paper, written by Ian Hui and Gareth Lam, discusses the factors driving the recent jump in commodity prices, and whether they are entering a supercycle.

A preview of China National People’s Congress

This paper, written by Chaoping Zhu, provides our forecast of what will be discussed and announced in China's National People's Congress on March 5, as well as its implications for investors investing in China.

Inflation worries and the rise in government bond yields

This paper, written by Tai Hui, discusses the recent rise in government bond yields on the back of market expectations of economic recovery in the U.S., upcoming fiscal stimulus and the prospects of high inflation, as well as its implications for different asset classes.

China’s path to policy normalization

This paper, written by Chaoping Zhu, discusses the potential path for China’s policy normalization after the country’s economy recovered from COVID-19.

Solving for income

The Solving for Income presentation uses selective slides from the Guide to the Markets – Asia to examine the role of income and how it will benefit investors by keeping it as a key investment objective.

Principles for Successful Long-term Investing

Our principle six time-tested strategies for guiding investors and their portfolios through today's challenging markets to reach tomorrow's goals.

A fresh flock of doves

What does Biden's presidency mean for the global climate agenda?

Joe Biden’s presidency is expected to bring increased momentum on tackling climate change. Carbon intensity is likely to become an increasingly important metric in investment decisions.

Why and how to re-think the 60:40 portfolio

The challenge of low government bond yields means investors must rethink the 60:40 stock:bond allocation. Discover where they can turn for diversification.

U.S. 4Q20 earnings season

This paper, written by David M. Lebovitz and Ian Hui, discusses our views on the U.S. 4Q20 earnings season so far and its investment implications.

What are the implications of the Brexit deal for the economy and markets?

It is hard to remember a time when Brexit was not dominating British headlines, but at the midnight hour, UK and EU negotiators finally reached agreement on a new trade deal. This piece addresses the key questions surrounding the deal: what is covered, how does it impact the outlook for the UK economy, and what are the market implications?

How should Asian investors handle the current bout of market volatility?

This paper, written by Tai Hui, addresses the reason behind and our view regarding the latest market volatility and its investment implications.

What are President Biden’s policy priorities?

This paper, written by Tai Hui, discusses the implications of newly-elected President Biden's policies, such as those regarding COVID-19 and China.

Should investors worry about the recent rise in Treasury yield?

This paper, written by Tai Hui, discusses the implications of rising Treasury yields on inflation, the U.S. dollar and overall economic recovery.

What could upset a happy New Year?

This paper, written by Tai Hui, discusses the key market risks heading into 2021.

Northeast and Southeast Asia paving the way to prosperity

This paper, written by Ian Hui and Alex Cheung, analyzes the recovery of various Asian economies from the COVID-19 pandemic and discusses the near-term and longer-term regional outlook.

Should investors worry about inflation?

This paper, written by Tai Hui, discusses the outlook on central bank policies to address inflation concerns heading into 2021.

The Year Ahead 2021

2020 has been an exceptional year, largely due to the onset of COVID-19 and the global economic fallout from the pandemic. This paper addresses nine questions that are most concerned by our clients regarding 2021 outlook for such an unusual economic and policy environment.

What does the end of the Fed’s credit facilities mean?

This paper, written by Kerry Craig, discusses the ending of various Federal Reserve credit facilities in a time of lower fiscal support and weaker economic activity.

Was the 3Q earnings season really that great?

Thsi paper, written by Ian Hui and Alex Cheung, analyzes the 3Q 2020 U.S. earnings results and the outlook for the COVID-19 pandemic.

Election 2020: Results and consequences

This paper, written by Dr. David Kelly and Meera Pandit, provides the latest update on the U.S. presidential election and its investment implications.

How should investors consider the impact of climate change on their portfolios?

This paper, written by Vincent Juvyns, looks at how investors can manage climate-related risks in their portfolios, while also driving real change.

What should investors do, given the latest surge in COVID-19 in Europe and the U.S.?

This paper, written by Tai Hui, discusses the recent rebound in COVID-19 cases and their implications on global markets.

China’s recovery on track

This paper, written by Chaoping Zhu, addresses the latest Chinese GDP data and recovering economy with its investment implications.

The Fed’s Timetable

Turbulence defines today’s investment environment, with great waves of uncertainty surging from the pandemic, the election, fiscal policy and a slowdown in what had been, to this point, a sharp recovery from a very deep recession. The waves of uncertainty should fade in 2021 and, as they do so, the primary role of interest rates in determining asset class returns should reassert itself.

Are Chinese authorities worried about the Chinese yuan's strength?

This paper, written by Tai Hui, discusses the outlook on the Chinese yuan following its recent strong performance.

What are the implications of China's inclusion in the FTSE WGBI?

This paper, written by Alex Cheung and Ian Hui, discusses the outlook on the Chinese fixed income market following FTSE Russell’s decision to include China in its World Government Bond Index.

Rebalancing for high-quality growth: What to expect from China’s new five-year plan

This paper, written by Chaoping Zhu, gives our prospects about China’s upcoming 14th five-year plan. To be approved in October and implemented during 2021 to 2025, this plan will have profound impacts to Chinese economy and financial market.

What is the latest progress of China's economic recovery?

This paper, written by Tai Hui and Chaoping Zhu, discusses the outlook on China following recent economic data releases.

Why should I invest in equities when they are already so expensive?

This paper, written by Tai Hui, discusses the positive outlook on global equities despite high valuations.

Can the market bounce back?

This paper, written by Kerry Craig, discusses the longer-term outlook for equities following the recent sell-off of tech and growth stocks.

US presidential election 2020

All the analysis investors need as America selects its next president

What does the Fed’s latest change in monetary policy framework mean for Asian investors?

This paper, written by Tai Hui, discusses the recent statement by the Federal Reserve and its implications on global markets.

What are the implications from the latest review of the U.S.-China Phase One Agreement?

This paper, written by Tai Hui, analyzes the recent discussion between the U.S. and China regarding the Phase One trade agreement.

Loss aversion: How does this impact investors now?

Loss aversion refers is the preference to avoid losing compared to gaining an equivalent amount.

Asia Insights

Top questions on Asian economic and financial market developments

Where do we stand in the economic recovery?

Last week, we learned that the unemployment rate fell to 10.2% in July.

Will tensions between the U.S. and China keep rising?

This paper, written by Gabriela Santos, discusses the outlook for U.S.-China tensions amidst COVID-19 and the upcoming election season.

The Investment Implications of the Coronavirus Debt Surge

Notes on the week ahead from Dr. David Kelly, Chief Global Strategist

Introducing our Asia COVID-19 tracker

This paper, written by Ian Hui and Alex Yeo, provides a framework for comparing the policy responses and risks faced by Asian economies from the pandemic.

What are earnings forecasts telling us about the recovery?

This paper, written by Tai Hui, analyzes the S&P 500 earnings reports and forecasts and their implications on the recovery from the effects of COVID-19.

How should current conditions be reflected in asset allocation?

We revisit asset allocation views as the global economy appears to be in the early innings of recovery, but stares down the limitations to growth in a pre-vaccine world.

Is the U.S. dollar weakness here to stay? What should investors do?

This paper, written by Tai Hui, examines the recent decline of the U.S. dollar and its implications on global markets.

Could a second wave of outbreak derail economic recovery?

A number of countries have seen a pick-up in new infections in recent weeks. Instead of derailing the global economy and forcing another dip in economic activities, the latest outbreaks are more likely to dampen and delay the global economy making a full recovery.

China’s 2Q GDP and June economic data improve on post-COVID rebound

This paper, written by Marcella Chow and Chaoping Zhu, discusses the rebound in Chinese economic activity and its implications for investors.

Monitoring the global impact of COVID-19

The spread of the coronavirus and its impact on global economic activity has materially changed the investment outlook for 2020. In this piece we provide a framework for tracking infection rates globally and monitoring the impact on economic activity.

Why should investors take a look at the Chinese fixed income market?

A consequence of the COVID-19 pandemic is that developed market central banks have pushed policy rates to zero, while engaging in asset purchases to keep bond yields low.

Does re-opening mean re-orienting equities?

This paper, written by Kerry Craig, discusses the improving market sentiment and the outlook on equities.

What are the arguments for investors to stay invested in long-dated Treasuries?

This paper, written by Tai Hui, provides an update on fixed income investment opportunities.

What can we expect from the National People’s Congress?

This paper, written by Chaoping Zhu, provides a preview of China’s expected economic policies ahead of the National People’s Congress.

What are some of the long-term structural changes from the COVID-19 pandemic?

This paper, written by Tai Hui, provides an analysis of the potential long-term investment implications from COVID-19.

Does a slowdown in new infections mean the worst is over?

Investors are keenly monitoring the number of new infections around the world to gauge whether the COVID-19 outbreak is under control.

Chinese GDP in Recession amid Virus Outbreak

This paper, written by Chaoping Zhu, discussed the performance and outlook of Chinese economy, policies amid the global pandemic and implication for investors.

How vulnerable are emerging markets?

Spreads on emerging market (EM) bond yields have widened to levels not seen since the global financial crisis as concerns grow about the size of the economic downturn.

Can oil prices recover if there is a deal between OPEC and Russia?

Oil prices collapsed in early March due to the price war between the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, and Russia

China set to advance stimulus efforts

As governments around the world step up their fiscal packages to counter the economic fallout from the COVID-19 outbreak, the Chinese government is also following the same path.

A COVID-driven spike in claims

Initial claims for unemployment insurance surged to the highest level ever: 3,283,000, spiking from a slightly revised 282,000 last week.

The COVID-19 Relief Bill-Holding the Economy in Suspended Animation

This paper, written by Dr. David Kelly, reviews the U.S> relief bill and its investment implications.

What is the Fed doing and what does it mean for fixed income?

The U.S. Federal Reserve (Fed) has pulled out its alphabet bazooka in an effort to ensure sufficient liquidity and the smooth functioning of financial markets, while also providing credit to businesses that are affected by the spread of COVID-19 and the stall in global economic activity.

The Fed’s aggressive actions to restore market stability

In the past two weeks, the traditional negative correlation between equities and government bonds has broken down.

Will the Fed’s shock and awe work?

The U.S. Federal Reserve (Fed) opted for another surprise rate cut this morning (March 16, Asia time), instead of waiting for the March 17-18 Federal Open Market Committee meeting.

What does the latest oil price collapse mean for investors?

It is important to avoid trying to predict the future; rather, clients are best served by monitoring the present situation and maintaining composure.

How low can U.S. Treasury yields go?

Worries about the spread of the COVID-19 virus continued to grip markets this week.

Equity markets fall into correction

This paper, written by Tai Hui and Kerry Craig, addresses the latest equity markets’ correction and its investment implications.

Could the COVID-19 outbreak derail Asian economic growth?

The good news is that the number of new confirmed COVID-19 cases in China is coming down and that more people are now recovering than getting infected.

What happens if the Fed tries to normalize its balance sheet again?

The U.S. Federal Reserve (Fed) has become a dominant player in the bond market through successive rounds of quantitative easing (QE).February 19, 2020

Could we see more monetary easing by Asian central banks?

The economic fallout from the Coronavirus outbreak is expected to become more significant for the rest of Asia in the weeks ahead.

What can the Chinese authorities do to protect growth from the outbreak?

China will also need to start addressing the economic fallout soon, as businesses face significant pressure from disruption to consumption.

Can China sustain its strong economic momentum?

This paper, written by Chaoping Zhu, discusses the outlook on China following its recent economic data releases and fresh outbreak of COVID-19 infections.

What are the implications of rising corporate bond defaults in China?

This paper, written by Marcella Chow and Chaoping Zhu, discusses the outlook on capital markets following a rise in Chinese bond defaults.

Is the U.S.-China trade war over?

Policymakers on both sides of the Pacific have emphasized that they view their work as incomplete and that several issues remain un-addressed.

Should investors still worry about US-China trade?

The U.S. and Chinese governments gave markets an early Christmas present when they agreed to a partial trade deal. However, much will depend on the details.

Time-tested strategies

With over 30 years of demonstrated results, we rely on the same credit process that brought us through the economic downturn of 2008. Watch Jimmie Irby, Global Head of Risk and Credit Administration as he describes J.P. Morgan’s risk process.

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