30 December, 2015
Research Team at Goldman Sachs, expects global GDP growth to edge up from 3.1% in 2015 to 3.5% in 2016, although the improvement largely reflects stabilization in some of the hardest-hit EM economies.
“Elsewhere, we see more modest changes, including a small acceleration in Europe and Japan. That said, we expect above-trend GDP growth in Europe through to 2019.”
“Our economists also expect US interest rates to rise faster and peak at a higher level than current forwards imply. Rising US rate expectations should push US bond yields higher. Market-implied inflation expectations seem too low for both the US and Europe according to our bond strategists.”
“This combination should push the USD higher; we continue to expect USD strength versus the EUR, however the ECB meeting did not show the commitment to extending QE that we and the market had expected. Given this, our FX strategists have put their targets under review. A weaker EUR, even if it’s not as weak as we had previously forecast, should help boost returns in local currencies and also help companies with high USD revenues.”
“Our key themes for 2016 are: 1) Commodity differentiation; a more positive view on Oil stocks, but we remain negative on Basic Materials; 2) Industrial differentiation; a more positive view on opex-facing companies while we remain negative on capex-facing; 3) Consumer differentiation; a positive view on Consumer Cyclicals but we remain negative on Consumer Staples, and a positive view on European cyclical recovery via our basket (GSSTEUGR); 4) Income differentiation; negative on defensive yield and positive on yield plus growth (we recommend our basket GSSTHIDY), and 5) EM differentiation; stay positive on EM consumer vs. EM industrial exposure (GSSTBRCC vs. GSSTBRCI).”
Rising diplomatic tensions continue to underpin safe-haven demand. Subdued USD price-action remains supportive of a mildly positive tone. A modest...
Struggles to build on overnight strong up-move despite a goodish USD rebound. Bulls tracked retracing US bond yields, tough risk-on mood...
The index rebounds from tops and tests 95.70. Yields of the US 10-year note ease a tad from peaks around 2.90%. US trade balance figures next of relevance...
USD weakness came to a halt yesterday after the Fed's Kaplan emphasised the central bank's independence, thus reassuring markets that
Brexit uncertainty, Turkish contagion fears leave the higher-yielding GBP vulnerable. Attention turns to Tuesday UK jobs report amid empty docket today...
The commodity extended last week's rejection slide from $1235 horizontal resistance and remains within striking distance of an important horizontal...
Gold has fallen to a yearly low, as it lost around 4% in June itself (end-of period prices), contrasting sharply with the above $13000/oz. price performance in the early part...
Fading German political uncertainty lifts EUR and prompts some weakness. Flattening of the US yield curve further collaborates to the weaker tone...
At this point, it would be extremely surprising were the Committee to forego a rate hike. Economic data have indicated accelerating activity over the...