News

Biotech Sector: ETF Analysis Shows Overvaluation is Deflating

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While the biotech sector had long enjoyed investors’ attention, it was never as pronounced as around the time the pandemic was felt around the world. However, as 2022 unravels, so has the interest, with a steady downward trend in stock valuations across the board. The reasons behind the ongoing market… Read More »


Inflation, War, And COVID Drag On

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Headwinds Are Eroding Credit Buffers On May 17, we announced downward revisions to our global macroeconomic base-case forecasts of between 0.6% and 0.8% in the world’s three major economic regions. We now forecast growth of 4.2% in China, 2.4% in the U.S., and 2.7% in the eurozone in 2022. Underpinning… Read More »


EU Debt: The Only Way is Up

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■     The Recovery and Resilience Facility (RRF) entered its main stage where every additional disbursement by the EU to a Member State must be preceded by the achievement of the relevant milestones and targets. It is therefore essential to track the actual implementation of structural reforms and investments in order… Read More »


The ‘real regime’ during the equity correction

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■     Since the start of the year, a combination of hawkish monetary policy, the war in Ukraine and the risks from China zero-COVID policies have dragged markets in a ‘Balanced Bear’, with equities selling off alongside bonds. ■     With a worsening growth/inflation mix, inflation expectations have decorrelated from growth pricing,… Read More »


European banks: strong profits, capital buffers protect creditors from softening macro outlook

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At times of great uncertainty, it is useful to step back from the ambitious and often near-impossible goal of forecasting financial impacts with precision, and to focus instead on the availability of buffers for risk protection. In this report, we offer a simple, transparent framework for assessing the vulnerability of… Read More »



The Economics of Algorithmic Stablecoins

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■     In addition to the major drop in cryptocurrency prices, digital asset markets have recently been dominated by volatility in stablecoins—cryptocurrencies intended to be pegged 1:1 with fiat currencies, most commonly the US Dollar. Within the last few weeks, two prominent “algorithmic” stablecoins have de-pegged (“broke the buck”), Terra USD… Read More »


Why we still prefer stocks over bonds

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·We recently cut risk, but stick with stocks over bonds for now. Equity prices now reflect much of the worsening macro outlook and hawkish Fed, in our view. ·Markets came to grips last week with the trade-off central banks face: choke off growth or live with inflation. Yields fell and… Read More »


Global Markets Daily: Why Defaults Won’t Rise, Even If the Economy Slows

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■     The increasingly hawkish stance of monetary policy and heightened market volatility have focused investors on the prospect of a recession in the near term, but as our colleagues have previously discussed, many markets tend to have weak recession forecasting power. Similarly, in previous research, we’ve also shown that despite… Read More »


European Daily: BoE — How Different from the Fed?

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■     The Bank of England’s cautious messaging at last week’s MPC meeting contrasts sharply with the Fed, which accelerated its tightening pace to 50bp increments. Given the many similarities between the UK and US economies, we explore whether the BoE’s macro backdrop is sufficiently different from the US to justify… Read More »